Retail Case Study

RETAIL SALES CASE – PART 1 MEMORANDUM

TO: Retail Chain Management

FROM:

DATE: March 16, 2011

SUBJECT: Analysis of Sales per Square Foot

The purpose of this memorandum is to provide Management with my firm’s initial analysis of the retail sales for your chain. Please note, for simplicity purposes, we used a subset of the population. We are confident that the sample group defines an accurate representation of population, which is too large to collect data and formulate conclusive findings. This subset is more manageable and allows us to make inferences from the sample to the population accordingly.

To begin, my firm has collected data from several of your retail stores to provide you with a general overview of your sales figures. We based our initial analysis on sales per square foot as this is the industry’s standard metric for measuring a store’s success. The firm found that your average (mean) sales are about $445, with sales ranging from $127 to $692 per square foot (e.g. range = $565/sqft). The median sales per square foot are $461. For a better measure of the stores sales, we also calculated the standard deviation to be $113. This indicates that the sales per square feet in this sample are clustering within $113 around the mean of $445. In fact, 65% of sales are in the interval dictated by the standard deviation, $332 to $558. Based on our observations, we have concluded that the distribution of sales per square foot is skewed towards the higher price range.

I would like to bring to your attention the sales per square foot from your retail stores per demographical area. As you observed Attachment 1, Frequency Distribution, you will notice that a large portion of retail sales is concentrated between $300 and $600 per square foot across all areas, with a major cluster of sales between $450 and $500 per square foot. The Urban stores have the highest sales volume per square footage, with about 89% of their sales being greater than or...