A quick crib sheet by One Red Kite that helps users understand how Spend Per Head is calculated and how you can influence it.

1. The Most Important Metric In Travel Retail
Year On Year
Change in Sales
Change in
Transaction Count
Change in the
Number of
Passengers
Change in
Conversion
Change in Average
Transaction Value
Change in Average
Number of Items in
a Transaction
Change in the
Average Price per
Item
Influencers of
SPH. These are
within your
control.
Out Of Your
Control
Total Sales Value
Departing Passenger Number
= Spend Per Head (SPH)
ESSENTIAL TRAVEL RETAIL METRICS –
SPEND PER HEAD
How to Influence Spend Per Head
1. Get more people to shop.
2. When they shop, get them to put more items in their basket.
3. When they shop, get them to trade up to a higher price.
Where possible, calculate Spend Per Head (sometimes referred to as income Per Pax or Spend Per Pax).
Spend Per Head removes the effect of changes in passenger numbers have on sales. Retailers use this
metric as the foundation of everything – sales forecasting, budgeting, scenario planning, business cases
etc. Free passenger numbers can be found at www.anna.aero. If you use these, divide them by 2 to get
outbound numbers. Complete this calculation for the same period in the previous year and compare.
Copyright – One Red Kite Ltd 2017
Worked Example
Glossary
PAX Passenger numbers. Use departing passenger numbers for the
location you are analysing.
ATV Average Transaction Value - sales divided by the number of
transactions.
UPB Average units per basket (transaction)
ARP Average Retail Price paid for items.
Conversion Number of shopper turned into buyers. Calculated by taking the
number of transactions and dividing it by passengers. Sometimes
called Penetration.
Penetration Some retailers refer to Penetration in terms of footfall into the
store, others refer to it as Conversion.
Sales – 2,000,000
Pax – 4,000,000
= SPH - 0.50
In this example, Sales are 2m, Departing Passengers are 4m. Therefore Spend Per Head
is 0.50. To increase this figure, the store or brand needs to increase conversion, units
per transaction or trade up (increase price).
If you have any questions, please feel free to get in touch:
Kevin.Brocklebank@oneredkite.com
+44 (0) 7739 752 272
www.oneredkite.com
Questions?