A specialty food store's margin depends on its mix. A pound of cheese cut to order costs $14.48, the wheel's price with its rind and trim, the paper and the card fee, and sells for $26.00, a 44.3% margin. Imported pantry goods, olive oil, pasta, preserves, keep 39.1%, local makers' jars bought at wholesale keep 36.9%, and gift boxes keep 47.8%, the most of all. What the store pays out of that margin is rent, staff and the cheese that doesn't sell in time. Margin = (price − cost) ÷ price. In the example below, a month of four lines brings $38,002 of sales and about $15,870 of gross profit, before wages, rent and power.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- A pound of cheese: $14.48, sold for $26.00, 44.3%.
- Cheese keeps more than the pantry shelves, with rind and trim counted.
- Local makers' jars keep 36.9%.
- Gift boxes keep the most, 47.8%.
- TaroStack keeps every item costed from what you paid, with waste by reason. More below.
A pound of cheese, costed
Camel's Back Provisions, the made-up specialty food store in Boise, Idaho, I use in these examples, counts the rind and trim of each wheel in the cheese's cost:
| A pound of cheese, cut to order | Cost |
|---|---|
| Cheese, at the wheel's price with rind and trim | $13.50 |
| Cheese paper and label | $0.20 |
| Card fees, 3% of $26.00 | $0.78 |
| Cost | $14.48 |
The store's year is in gourmet food store business plan, and opening one in how to open a specialty food store.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Cheese, per pound, cut to order | Cheese counter | $26.00 | $14.48 | $11.52 | 44.3% |
| Imported olive oil, 500 ml | Pantry shelves | $18.99 | $11.57 | $7.42 | 39.1% |
| Local jam, 9 oz | Local makers' shelf | $9.99 | $6.30 | $3.69 | 36.9% |
| Gift box | Gifts and holidays | $65.00 | $33.95 | $31.05 | 47.8% |
The olive oil stands in for the pantry shelves; the gift box keeps 47.8%, its contents at cost plus the box.
A month's numbers
A month for Camel's Back Provisions:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Cheese, per pound, cut to order, cheese counter | 540 | $14,040 | $6,221 |
| Imported olive oil, 500 ml, pantry shelves | 630 | $11,964 | $4,675 |
| Local jam, 9 oz, local makers' shelf | 700 | $6,993 | $2,583 |
| Gift box, gifts and holidays | 77 | $5,005 | $2,391 |
| Month | $38,002 | $15,870 |
The cheese counter brings the most gross profit, about $6,200, as long as each wheel is cut down before it dries out. The local makers' shelf keeps the lowest margin, and the store keeps it anyway: it's part of why people come in. Wages, rent and the cheese case's power come out of the gross profit; a store built around cheese is in cheese shop business plan.
Get the calculator
Download the specialty food store margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one cost per item. A wheel that dries out before it sells, a supplier's new price, and a holiday rush of gift boxes change what each category really keeps.
How TaroStack does it
TaroStack keeps every item costed from what you paid, with waste by reason, so each category's real margin shows.
Costed from what you paid. Each delivery is received at its price, so an item's cost follows the supplier's latest invoice.
Waste by reason. Trim, spoiled and expired stock is recorded with its reason, so what each category loses shows by item.
Price creep. A price-creep report per supplier shows whose prices are quietly rising.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What an item cost | The last invoice, remembered | Costed from what you paid |
| Trim and spoilage | Not counted | Waste by reason |
| A supplier creeping up | Noticed late | A price-creep report |
Receiving, costing, waste and price-creep reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.