How College Stores Stack Up
A new report provides benchmarks for comparing your college store’s figures to stores of similar type and sales volume.
By Julie Traylor and Martha Love
How does your college store compare to others across the country? Is your store too large, too small, or understaffed relative to your enrollment? How are sales?
From 2003 to 2004, sales increased 1.4 percent for the overall collegiate market, according to the 2005 “College Store Industry Financial Report,” compiled annually since 1979 by the National Association of College Stores (NACS), Oberlin, Ohio. New textbook sales increased 3 percent over 2002-03 sales, while used textbook sales dropped half a percent.
The report, which provides detailed national averages, spots trends to watch. Among the findings:
- Computer hardware sales increased 9 percent; the sale of computer supplies jumped 14 percent; software sales rose 5 percent.
- Dollar sales of computer products increased $100 million from the previous year.
- Other merchandise sales, such as trade books, school supplies, and general merchandise, declined from the previous year.
- Insignia product sales stayed flat.
- Online sales increased from an average of 2.8 percent of store sales in 2002-03 to an average of 3.4 percent of sales in 2003-04.
Course Materials Drive Sales
The NACS report reveals that the big sellers in college stores are course materials, which range from 46 percent to 91 percent of a store’s net sales. Factors that drive these sales include the store’s overall sales volume, the type of institution the store serves, and student enrollment. Generally, the smaller the store, the higher the percentage of sales derived from course materials. Likewise, the greater the store’s overall sales volume, the lower the percentage of course material sales.
|Store Sales||Percent of Course Material Sales|
|Less than $1 million||77.57%|
|$1 million to $2.9 million||77.44%|
|$3 million to $6.9 million||75.16%|
|$7 million to $9.9 million||68.19%|
|$10 million to $13.9 million||64.59%|
|Greater than $14 million||53.37%|
Because they make up the largest percentage of sales, new course material sales are an important measure of business. To measure customer service, you can examine the sale of used textbooks—an indicator of how well stores meet students’ demand for less expensive books.
|Store Sales||Percent of Used Text Sales|
|Less than $1 million||17.57%|
|$1 million to $2.9 million||17.90%|
|$3 million to $6.9 million||20.86%|
|$7 million to $9.9 million||21.82%|
|$10 million to $13.9 million||19.01%|
|Greater than $14 million||11.21%|
Other highlights gleaned from the report:
- The average budgeted income for stores with a profit motive is 8.9 percent of sales; the average budgeted income for stores with a cost-recovery goal is 6.3 percent of sales.
- The average gross margin is 26.9 percent of sales. Average operating income for college stores is 8 percent of sales. By adding other income (1.2 percent) and subtracting other expenses (0.7 percent), college stores average a net income of 8.5 percent of sales.
- Net income varies by sales volume as well as by the type of institution served. The income reported by college stores in 2005 ranges from -1.0 percent to 16 percent of sales.
- Sales growth also varies by sales volume. The average sales growth for stores is 4.1 percent of sales. Change in sales also varies by stores serving different types of campuses. During the past four years, stores serving two-year institutions have shown a greater average increase in sales than stores serving four-year institutions.
|Change in Sales|
After cost of sales, personnel costs are typically the largest expense for college stores. Depending on the state in which the college store operates, the type of institution it serves, and the type of store ownership, the ratio of full-time to part-time staff can differ significantly, even when stores have similar sales and numbers of full-time equivalent (FTE) staff.
|Comparing Staff Levels|
|Store A||Store B||Store C|
|Net sales||$ 3.5 million||$ 3.5 million||$ 3.5 million|
|Number of FTE staff||8||8.9||8.5|
|Number of full-time staff||7||2||6|
|Number of part-time staff||3||28||7|
Using the data, you can compare college store staffing levels by the number of FTE employees, personnel costs as a percent of sales, and sales per employee. By taking the total store sales and multiplying it by the percentage of personnel costs (and dividing that number by the number of FTE employees), you can determine a general cost per employee.
|General Cost Per Employee|
Store Sales x Percent of Personnel Costs = Total Personnel Costs
Personnel Costs / Number of FTE = Personnel Costs per FTE Staff
The NACS report offers multiple measures for comparing the amount of space that college stores occupy.
Size of store. The average size of a college store, based on data reported in 2005, is 11,800 square feet. The median size is less than 6,250 square feet. Stores in the survey range from less than 500 square feet to more than 100,000 square feet.
Ratio of selling space to storage space. The average ratio of selling space to storage space for college stores is five to one.
Sales per square foot of selling space. If your store averages more than $800 in sales per square foot of selling space, it is right in line with the 2005 sales average of $811.
Square feet per student. To confirm that your college store has the appropriate space, you can use industry benchmarks to calculate the acceptable number of square feet per student. To maximize sales and service potential, NACS recommends three to four square feet per student for enrollments under 5,000; two and a half to three square feet per student for enrollments of 5,000 to 10,000; and one and a half to two square feet per student for enrollments above 10,000. The average reported by college stores did not meet the recommended space for any enrollment level.
|Store Space Per FTE Student|
|Enrollment||Square Feet Per FTE|
|Less than 1,000||Insufficient data reported|
|1,000 to 2,500||2.1|
|2,500 to 5,000||1.4|
|5,000 to 10,000||1.1|
|10,000 to 15,000||1.2|
|15,000 to 20,000||1.1|
|Greater than 20,000||1.2|
Approximately 400 college stores across the nation supplied the data for the 2005 “College Store Industry Financial Report.” Of the respondents, 47 percent have enrollments of less than 5,000; 20 percent have enrollments between 5,000 and 10,000; and 33 percent have enrollments in excess of 10,000.
- NACUBO Provides Input on Tax Reform
- FASB Considers Delaying Revenue Recognition Standard
- Push for Resolution to 1098-T Fines Continues
- 2015 Higher Education Accounting Forum
April 26-28, 2015
- 2015 CAO and CBO Collaborations
August 3-4, 2015
- 2015 Planning and Budgeting Forum
September 28-29, 2015
- WEBCAST: NACUBO LIVE!: The Future Chief Business Officer
Tuesday, April 28, 2015 11:00AM ET
- WEBCAST: Analytics that Support Planning, Budgeting, and Results
Thursday, April 30, 2015 1:00PM ET
- WEBCAST: Corporate Sponsorships: Getting it Right
Thursday, May 14, 2015 1:00PM ET
- WEBCAST: Lessons Learned in Communicating Financial Information Effectively
Monday, May 18, 2015 1:00PM ET
- ON-DEMAND: Looking Under the Hood: Using Web-based Tools for Evaluating Institutional Financial Aid Policy
- ON-DEMAND: VIRTUAL: 2014 Annual Meeting
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis