Space - Occupancy Cost
Occupany Cost Calculator Explained:
(a) What is this? This calculator shows the cost a business increases to rent, or occupy space.
(b) What does this tell me? The cost, in dollars, it costs the business to rent each square metre/foot of space. Often this calculator is used to compare costs between businesses within the same industry.
(c) Why should I use it? To allow you to assess what sales and gross margin will be required to cover the occupancy costs alone. In addition, the calculator can be used to assess the cost of occupancy between one retailer and another. This is an interesting exercise when comparing retailers within a chain, franchise or group of stores, the variations can be significant.
(d) Caution: Be consistent with the space measure that you use. Some retailers only measure the selling space, not the entire space that they rent. This is an issue because retailers pay for all of the space, not just the selling space. Simply because a retailer has a higher cost for space than another retailer does not qualify you for a reduced rent. Seek the advice of industry professionals if seeking to change the amount of space you rent/lease, or are seeking to change the rent you pay. You use this calculator at your risk.