Profit margin is the difference between revenue and costs. It measures how much you're making after operating expenses, taxes, and even depreciation. Profit can be calculated by subtracting costs from sales in a company's profit and loss statement. The common profit margin ratio is the gross margin percentage divided by revenue.
Supermarket Industry Overview
The supermarket or grocery store industry is largely fragmented. The top 10 supermarket chains account for 35% of the entire no. of stores. The top 100 supermarkets, retailing 4 percent of all food sales, have a market share that's twice as large as the average company’s market share in manufacturing or industrial businesses.
Margins for Small Markets
According to a study performed by Kellogg University, smaller supermarkets can raise their profit margins by concentrating on customers who tend to shop between 9 a.m. and 5 p.m. on weekdays. The study found that 43% of the customers were between 45 and 64 years old, was predominantly female, and tended to be more cost-conscious than average shoppers.
