Contact us
In retail, we obsess over product selection, pricing, loyalty, staff, supply chains, digital transformation, ecommerce and everything in between. But walk into almost any store and you’ll find one of the most powerful levers of growth hiding in plain sight:
Space.
The best retailers don’t treat space as a cost to be minimised. They treat it as a strategic asset to be maximised.
We work with major retailers across Australia, New Zealand, the UK, APAC and the US, and the patterns are clear. The retailers achieving outsized returns, the ones consistently outperforming on margin, productivity, and customer experience, all have one thing in common: data-driven strategic space planning.
In many businesses, space management sits deep in the operational layer, somewhere between category management, supply chain and store ops – a functional necessity, rather than a strategic advantage. But this lens is changing.
The idea that ecommerce is the demise of the physical store has, thankfully, been debunked as a store network becomes a competitive advantage for those retailers embracing its strategic power.
And in a world where customers expect more choice, more convenience, and more relevance, precision in how space is allocated is becoming one of retail’s most important capabilities.
Many retailers underestimate just how impactful space optimisation can be. A 1% uplift in sales or margin per store sounds small. But across a national network, that small improvement can routinely create tens of millions in gross profit. Few other retail investments offer that degree of leverage. That’s because sales uplift is achieved largely through existing operational activities that are simply done more efficiently and effectively.
Why is this opportunity overlooked? Often teams lack the tools to quantify what an optimised space plan might deliver.
Using the latest in scenario planning capability, like Scalene’s Space Advisor platform, a planner can produce a variety of plans and quantify the uplift in sales and margin to inform fast, insightful decision-making. When retailers apply true space intelligence, space becomes a self-funding engine for ongoing margin growth.
For some proof, we can look to one of the world’s largest retailers – Dollar General. With 21,000 stores across the USA, they are using space to outcompete rivals through their store renewal program, which is targeting 4,800 projects annually, up from 2,400 a year earlier.
The company’s goal is to drive first-year annualised comparative sales lifts in the range of 6% to 8% for Project Renovate stores and 3% to 5% for Project Elevate stores. “Between these two remodel approaches, we expect to … significantly improve the shopping experience within our stores, while elevating the brand and driving greater top and bottom-line contributions from our robust mature store base,” noted Dollar General CEO Todd J. Vasos in his 2025 Q1 earnings call. While the cost of a Project Renovate remodel is approximately half that of a new store, a Project Elevate remodel costs significantly less. “Notably, we anticipate returns on both of these projects to well exceed the healthy returns generated by our new stores,” said Vasos.
The approach is working with Q2 FY25 sales up 2.5% and gross profit up 8.2% on a year prior.
The retail landscape has changed
The retailers winning in today’s challenging environment are those who understand that space can’t be static. It must adapt, continually, to changing demand patterns, local nuances, and real-time behaviours.
Space is becoming more dynamic.
More data-led.
More reflective of customer preferences.
More finely tuned to local demand.
This requires taking a data-driven, performance-based approach to space decisions.
At Scalene, we’re seeing three major mindset shifts among high-performing retailers:
Retailers who do this well will grow faster, generate more profit, and deliver better customer experiences, all within the physical store assets they already have.
These shifts aren’t just best practice, they’re fast becoming required practice.
Get in touch to discuss how we can help improve your business performance, store by store.