"Rent expense as a percentage of sales tends to decline as stores become more productive," Chen wrote. "Conversely, retailers with low store productivity measured by sales per [square foot] tend to have a higher rent expense as percentage of sales." Fort many retailers, base rent should be no more than 5% to 10% of annual gross sales. To calculate the base rent to sales ratio divide the annual base rent by the forecasted sales. If you forecast $875,000 in sales for your quick serve restaurant and the base rent is $10,000 per month, the base rent to sales ratio is 13.7%. Small Business Rent as a % of Receipts . This table compares rental cost characteristics for Sole Proprietorships for more than 150 industries. The lowest average rent-to-sales ratio of 1.24 percent applied to building material retailers, while clothing and accessory stores averaged paying 8.93 percent of their sales in rent. Restaurants and bars paid an average of 7.62 percent of their sales in rent. The rent to sales (revenue) ratio is a great way to decide if a commercial real estate site (office, retail, or warehouse) makes economic sense to lease. For example, a percentage lease might require a tenant to pay 7 percent of all sales that exceed more than $25,000 in any given month. Seven percent is a common percentage lease figure. The Breakpoint Your breakpoint is the point at which a landlord will typically require that you begin paying percentage rent. It's the point where your percentage rent equals your base rent. For example, a retailer may pay $10 per square foot with 4,500 sqft, and thus would pay $45,000 in rent or $3,750 per month. The percentage rent would kick in after a certain amount of gross sales are met. The point at which percentage rent is paid is called a breakpoint and can either be a natural or artificial breakpoint. Whereas occupancy costs as a percentage of store sales differ widely. Small Business Rent as a % of Receipts . This table compares rental cost characteristics for Sole Proprietorships for more than 150 industries. Landlords in shopping centers and some strip malls may demand a share of a retail ... percentage rent. The Secret to Retail Store Profitability. There was simply no way to achieve a profitable sales/rent ratio in the LA store. Basic Percentage Rent Issues; ... of $1.25 million above which the tenant would pay 5 percent of gross sales as percentage rent. Basic Percentage Rent Issues; ... of $1.25 million above which the tenant would pay 5 percent of gross sales as percentage rent. what percentage of gross sales should go to rent in a retail store? Depending on the type of retail/mark up on the items being sold. What Percentage of Rent Should You Pay According to Your Business' Gross Income? ... What Is a Good Payroll Percentage for a Retail Store? The market for retail tenancy leases in Australia . ... percentage of the store for a sales counter, ... International Retail Rent Comparisons . What Are Acceptable Industry Norms for Retail Payroll ... what are the normal rates for payroll for a retail store. Non-Store Retail. Kiosks. Mail-Order Houses. Online Shopping. Motor Vehicles. Retail Vocabulary 101 Scott Schuler ... Last year, my sales were $500,000. My store ... Overage, or percentage rent Top 10 KPIs in Retail. ... performance indicator for a retail store is the sales generated over a ... to gross profits expressed as a percentage of sales. Luxury retailers are paying top rents in the U.S., a reflection mostly of their store locations.