Apple's Same-Store Sales Are Flat and That's Great

Moneybox
A blog about business and economics.
Jan. 9 2014 3:32 PM

Apple Shouldn't Sweat Same-Store Sales

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Apple store

Photo by Taylor Hill/Getty Images

I enjoyed Jeff Chu's profile of Angela Ahrendts, Apple's new retail chief, but this skepticism about the health of the retail business as it exists seems unwarranted:

Yet Apple’s retail business has also fallen into relative stasis. Its per-square-foot sales are still the envy of retail—just over $6,000, about twice what runner-up Tiffany records—and net sales rose 7% in fiscal 2013, but per-store numbers were flat, since Apple opened 26 new stores during the year.
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Per store sales trends are a key metric for almost any retailer. But if you're already the leader in sales per square foot it's really not so relevant. If you're actually double the per square foot number of the nearest competitor, then you're a ridiculous outlier and you should completely forget about it.

The world, it seems, could absorb more Apple stores. Potentially a lot more Apple stores. But if you open a store in downtown D.C., it'll to some extent cannibalize sales from existing locations in Pentagon City and Georgetown. If you open a store in Brooklyn, it'll to some extent cannibalize sales from existing locations in Manhattan. To the extent that you focus on same-store sales, this is the kind of thing that will impel you to slow your expansion. And that's something a lot of companies need to think about. But Apple's stores are so successful that it would be insane to get too hung up on these kind of cannibalization worries. The only question should be how quickly can they roll out new ones without excessively diluting the actual quality of the experience.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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