Supermarket Profit Ratio: Calculation of Gross Profit And Net Profit

Supermarket Profit Ratio: Calculation of Gross Profit And Net Profit

It is no different that the supermarket is an investment project with economic feasibility and profitable returns. But the profit of the supermarket varies from place to place, depending on the scale of the project, the daily sales volume, and the operating costs. But in general, to calculate the percentage of the profits of the supermarket, all you have to do is to calculate the imports at the end of each day and deduct the price of the goods in addition to deducting the costs of electricity, rent and workers’ wages from the total imports.

It is advisable, upon the actual start of the project, to provide an accounting system for measuring profitability and organizing the financial operations of the project.

How to calculate the percentage of supermarket profits

Supermarket profit percentage = store revenue – (total purchase value of sold goods + workers’ wages + electricity and water bills and taxes)

When measuring the percentage of supermarket profits, a distinction must be made between gross profit and net profit:

Gross profit (total revenue) = selling price – buying price

A simple definition of gross profit, whether for a supermarket or any other business, is the price at which they sell a good, minus the amount the store paid to make or buy that good.

Gross profit helps measure the profitability of commodity units. For example, if a supermarket sets a price of \$3.50 on a product for which it paid its supplier \$3.00, the store’s profit margin is \$0.50.

Net Profit = Total Revenue – Total Expenses

It is the profits that come after deducting all operating expenses (salaries, rent, bills…) and taxes from the total revenues.

Measuring net profit helps get a much clearer picture of total expenses compared to revenues. For example, if a supermarket this month had \$20,000 in revenue, and total expenses for the month were \$15,000. The net profit in this case is \$5,000.

To find out the expected revenues, operating costs, and the percentage of supermarket profits with examples and numbers, you can go to the pdf supermarket feasibility study page.

How to increase the percentage of supermarket profits?

Profits are the product of the gain minus the expenses, and the gain is the difference between the selling price and the purchase price. Therefore, the way to maximize the percentage of supermarket profits is either by increasing the profit or by reducing the expenses.

As for increasing the gain, it is either by selling more units or by increasing the difference between the buying and selling price. For example, some items may have a large difference between buying and selling, while others have a small profit margin, but a large number of units can be sold.

Increasing sales in general. There are techniques and methods that supermarkets follow: Z

As for reducing expenses, it is to rationalize the exchange…..

In fact, the best strategy to increase the supermarket’s profit is a combination of increasing profit and reducing expenses.

Tips to increase supermarket profits

The “supermarket” project does not require a lot of commercial expertise, but in return it requires taking a set of critical steps that help the success or failure of the project. The following points will help boost supermarket profits:

– A proper supermarket feasibility study will enable you to:

* Choosing the right place is one of the success factors
* Study the market well and learn about products and prices

The success of the supermarket also depends on the classification and method of arranging the goods. Therefore, the appropriate commodity will have to be placed on the appropriate shelf, as choosing the appropriate location to display a particular commodity within the supermarket requires the expertise of specialists in this regard. The abundance and variety of commodities in the supermarket poses a challenge in the way they are displayed and arranged. In general, the classification of commodities depends on:

* selling quantity.
* interest from selling it.
* Shoppers are used to buying them.
* The benefit of the product to the customer.

Accordingly, it is easy to distinguish between the “basic commodities” that cannot be dispensed with, and the so-called “optional commodities” in which quality standards differ and depend on the form of packaging and what is presented with it as a gift to entice the customer to buy it.

In general, the goods that are sold constantly and need a little publicity are placed on the right side of the market to get them in an easy way, and it is considered an entrance to “pulling” the shopper into the interior. As for the so-called “optional goods” that are not sold continuously, they are placed in the most visible places in order for the largest possible number of shoppers to pass near them, and thus increase the percentage of their sale. As for special commodities that are rarely purchased, they are subject to a “price-raising” plan, because the customer may take a long time to re-purchase them again, and raising prices contributes to maintaining the profit rate that is weakened by the capital freeze for a long period.

– As for publicity and advertising, the project management must implement a successful marketing and promotional policy by using the latest means and new marketing methods in marketing the project and its services through:

* A fully qualified project site in terms of traffic, mass flow, and distance from the competition.

* The prices are generally acceptable and commensurate with the prevailing prices in the market.

* Adding home delivery services within the project’s work environment as an added service in the later stages of the project.

Here are some ideas that can help improve sales:

* Variety of goods and provision of all required items

* Paying attention to the quality of products and following up on production and expiry dates

* Having a good stock of the goods

* Commitment to the dates of delivery of financial payments to merchants

* Commitment to opening and closing times of the supermarket

* Maintaining the cleanliness of the place

* Decoration and arrangement play a prominent role in drawing the attention of customers

The supermarket project remains one of the successful projects. It achieves daily sales and is characterized by the fact that the percentage of losses is very limited and the percentage of profits depends on the daily sales rate and operating costs. Great success can be achieved if the project is started after carrying out a detailed feasibility study for the project to determine the appropriate location, select the most requested commodities, and implement the project properly to achieve its desired goals.