OCR - Occupancy Cost Ratio calculator
Measure Your Retail Performance
OCR Calculator
OCR Performance Table
| OCR Range | Performance Level | Description |
|---|---|---|
| 0% - 5% | Excellent | Extremely efficient use of space relative to sales. May indicate very high sales volume or exceptionally low occupancy costs. |
| 6% - 10% | Good | Efficient use of space. Generally considered a healthy range for most retail businesses. |
| 11% - 15% | Medium | Acceptable, but room for improvement. May need to focus on increasing sales or negotiating better lease terms. |
| 16% - 20% | Concerning | Occupancy costs are high relative to sales. Action should be taken to improve sales or reduce costs. |
| 21% - 25% | Poor | Significant strain on profitability. Urgent need to increase sales or reduce occupancy costs. |
| 26% - 100% | Critical | Unsustainable in the long term. Immediate action required to address sales, costs, or both. |
Notes:
- The ideal OCR can vary by industry, location, and business model.
- Retail businesses generally aim for an OCR below 10%.
- Restaurants may have a slightly higher acceptable range, typically between 6% and 12%.
- High-end or specialty retailers in premium locations might tolerate higher OCRs due to strategic positioning.
- Always consider OCR alongside other financial metrics for a comprehensive assessment.
What is Occupancy Cost Ratio?
OCR is a vital metric in retail that shows what percentage of your sales goes toward occupancy expenses. This key performance indicator helps retailers and property managers determine if a store location is financially viable. A lower OCR typically indicates better store performance, while a higher ratio might signal the need for operational adjustment
OCR is a vital metric in retail that shows what percentage of your sales goes toward occupancy expenses. This key performance indicator helps retailers and property managers determine if a store location is financially viable. A lower OCR typically indicates better store performance, while a higher ratio might signal the need for operational adjustment
Why Calculate Your OCR?
Understanding your OCR is crucial for:
Understanding your OCR is crucial for:
- Evaluating store performance across multiple locations
- Making informed lease renewal decisions
- Negotiating better lease terms
- Comparing performance against industry standards
- Planning expansion strategies
How Our Calculator Works
Simply input your total occupancy costs (rent, utilities, property taxes, and maintenance) and your gross sales revenue. Our calculator instantly provides your OCR percentage, helping you understand if your location is operating within profitable ranges.
Simply input your total occupancy costs (rent, utilities, property taxes, and maintenance) and your gross sales revenue. Our calculator instantly provides your OCR percentage, helping you understand if your location is operating within profitable ranges.
Industry Insights
Different retail sectors have varying OCR benchmarks:
Different retail sectors have varying OCR benchmarks:
- Fashion retail: 8-12%
- Grocery stores: 3-5%
- Restaurant chains: 6-10%
- Specialty retail: 8-15%
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