, Retail
The end cap by the door sells four times what the same product sells halfway down aisle three. Everybody who has worked a shop floor knows this. Almost nobody writes it down, which means the decision about what goes there gets made by whoever shouted loudest at the last supplier meeting.
Shelf space is the one asset you pay for in advance, every month, whether it earns anything or not. Rent, business rates, heating, lighting and cleaning are all charged by the square metre. Stock is charged by the item. If you only manage the second one, you are managing the cheaper half.
Space is rent you have already paid
Work out what a metre of your shop costs. Take annual rent, business rates, utilities and the fixed part of your staffing, divide by the trading floor area, and you have a number per square metre per year. It will be uncomfortable. That is the point.
The rates part is not a mystery either. The Valuation Office Agency sets a rateable value for your premises, broadly the annual rent the property would have let for at a set valuation date, and your bill is that value multiplied by the relevant multiplier, less any relief. The 2023 rating list in England was based on rental values as at 1 April 2021, with the next revaluation taking effect in 2026. Small business rate relief in England gives 100% relief below a rateable value of £12,000, tapering away up to £15,000, and the thresholds and multipliers are reviewed, so check the current position rather than a number you remember from a previous year. Scotland, Wales and Northern Ireland run their own schemes.
Once you have a cost per square metre, every category can be measured against it. Sales per square metre is the crude version. Gross margin per square metre is the useful one, because a category can be busy and poor at the same time.
Eye level is not free
A planogram is just a drawing of what goes where, by facing, by shelf and by bay. Its value is that it forces you to decide before the delivery arrives rather than after.
The rules that hold up across most shops are unglamorous.
- Between roughly waist and eye height is the band that sells. Above and below it, sales fall away, faster for browse categories than for destination ones.
- Facings work, but not linearly. Going from one facing to two usually moves sales noticeably. Going from six to seven usually does not.
- Destination lines can survive a bad position, because people come in for them. Impulse lines cannot.
- Adjacency does work. Things bought together should be within sight of each other, not filed by manufacturer.
Measure by facing, not by line. Two facings of a product earning £180 a week is a different business from six facings earning £200.
The end cap is a separate business
Treat end caps and window positions as their own profit centres with their own numbers. They are the highest value space you own, and they should be on a rotation with a measured uplift, so you know what the position is worth before a supplier offers to fund it.
If a supplier does offer to pay for space, take the offer seriously and then check the maths. Space money is income, but it is income earned by giving up the right to put your best seller there. A promotional payment of £400 on a position that generates £600 of gross margin a month is not a deal, it is a discount you granted.
Watch the pricing rules while you are at it. The Price Marking Order 2004 requires the selling price and, for most goods, the unit price to be displayed clearly. The Price Marking (Amendment) Order 2024 tightened this, including unit pricing on promotional offers and consistency of units within a category, and came into force in April 2025. A promotional end cap with an unclear unit price is the exact thing a trading standards officer notices first.
Slow movers that earn their space
Not every slow line is dead weight. Some earn their place for reasons that never appear on a product report.
A high margin line that sells four a week in a category where everything else sells at 22% margin may earn more per facing than the fast mover next to it. A line that brings a particular customer in every fortnight, who then does a £40 shop, earns its space in the basket, not in its own sales. A line nobody else in town stocks is a reason to come to you.
So before you delist, ask three things. What margin does it earn per facing. What else does that customer buy in the same trip. Could anything you could actually get hold of do better in the same slot. If the answer to the last one is no, the space stays occupied either way.
The genuine losers are easier to spot than people admit. Low margin, low rate of sale, ten facings, available in three other shops within a mile, and bought originally because the rep was persuasive.
What the layout cannot ignore
Space planning runs into rules that do not negotiate. Aisle widths need to allow escape in a fire, and your fire risk assessment under the Regulatory Reform (Fire Safety) Order 2005 is the document that decides that, not the planogram. Stacking above head height brings the Health and Safety at Work etc. Act 1974 and the Manual Handling Operations Regulations 1992 into the conversation. Under the Equality Act 2010 you are expected to make reasonable adjustments so disabled customers can use the shop, and a gangway blocked by a dump bin is the most common failure there.
None of these are reasons to leave space vague. They are the boundaries inside which you optimise.
Where this shows up in the game
Shops are part of Business Baron's full game, and e-commerce is free to run. Rent and rates leave the account every month whatever the shelves are doing, so every metre of display has to cover its share. Something always has to come off before anything new can go on.