Apple Retail Stores Outperform Tiffany's, Best Buy

by , 4:55 PM EST, December 26th, 2006

Apple Computer has higher sales per square foot at its retail stores than Best Buy, Neiman Marcus, and even Tiffany & Co, according to a report released by Bernstein Research last Tuesday. Performance per square foot is one of the most important metrics in evaluating a retail chain's success. The report provided the numbers per square foot per year.

• Apple: US$4032
• Tiffany: US$2666
• Best Buy: US$930
• Neiman Marcus: US$611

The report cited Apple's better selection of location and better design aesthetics in the store compared to the competition. In addition, Apple has concentrated on premium products rather than cut-throat competition with PC manufacturers on very slim profit margins. As a result Apple earns an average of $23M in annual sales per store compared historically to Gateway's US$8M per store. Those Gateway stores are now all closed. Part of Apple's success was attributed to the fact that Apple customers can walk out of the store with the product; at Gateway they could not.

The report concluded that Apple's keys to retail success have been location, location, location. Design a great store, appeal to the impulse buyer, and maximize the revenue per square foot.

Apple has about 170 stores worldwide with about 150 of those in the U.S.