How much does the Owner of a Grocery Store Make? 

As much as I hate answering questions with it depends, this is one of those questions that has many variables. 

However, according to an industry report, convenience stores generated more than $616 billion in sales averaging $4 million from each store. 

After a rough estimate, I’ve found the average salary of a grocery store owner ranges from $50,000 – $200, 0000

The salary depends on the size and volume of products the grocery store sells. The profitability margin is about 1% – 3 %

Many readers often ask how much store managers from other big chains like Walmart and Costo earn. We’ll discuss everything you need to know about partnering with a franchise versus sole ownership. And some tips to help increase the profit margins of your store. 

Without further ado; 

Grocery Store Owners Salary – Comparison with Other Franchises

A grocery store owner can make up to more than $70,000 per year and this is very subjective. It could be more. 

You have to consider the location, market, and size of your store to generate money.

 As an owner, remember that all the profits are yours, this includes the salaries of employees. This could be a disadvantage as well because you are responsible for all the risks and losses. 

Partnering with other franchises could ensure you get brand recognition like Save A Lot Food stores is specifically favorable for independent retailers. 

Most partner supermarket franchises offer a competitive advantage for owners to get a head start in business. The only problem is the profit split which will see you earn less compared to owning the business solely. Franchise Gate of entry is much more exorbitant at $100,000 – $500,000

The franchise will also require you have liquid cash requirements, Net-worth requirements, and ongoing royalty fees. If you add all this up then a grocery store owner will likely be earning less compared to a fully owned business. 

Indeed.com reported that grocery store owners get an average of $96,198/year in the United States.

The recent pandemic has significantly increased the price to $146,071/year since March 2020. This new development will be seasonal and grocery store sales will likely see a decline when things get back to normal. 

The advantage of working with a Grocery store outlet program could lead to increased sales due to brand popularity. Depending on the franchise, there are some conditions like the budget that has to be met and agreement on profit splits. 

If you want to be independent and you can still look for initiatives to make good sales without the backing of a franchise then that might be a convenient option for many. 

Are grocery stores profitable? 

There’s no one fit answer to this question. What you should know is that grocery stores have typically small margins from 2 to 3 percent in profits.

This means you have to sell a lot of products to make up a sizeable income. Location, size, and income determine are the supermarket is going to be profitable. 

You also have to consider other expenses like the rent, municipal tax, Insurance, maintenance, employees, and power bill. If you can settle all the expenses you can expect almost 20% turn over in profit. 

The big players like Amazon, Walmart, and Kroger invest so much in buying bulk prices that the average consumer can’t put up to compete. 

Ensure Profit of Grocery Store by doing the following; 

Owning a grocery store could be challenging, the margin is usually less in dairy products. Household items have good margins of about 15%-20%. Owners can also capitalize on face wash products as they have up to 30-35% margins. Ensure that you buy products directly from suppliers in bulk to sell at a wholesale price. 

You should focus on increasing sales by scaling your business and investing more in the store. It’s easy to earn more than $45,000 even with a profit margin of 2-3%, and by cutting the cost of packaging you will be profitable. 

Big chains Store Manager Salary Scale

The big chains report more than $4 million per year according to this report. If a single retail store makes that amount imagine what the combined franchise will make. 

While they sit on a lot of cash, it doesn’t mean working in the store will make you a millionaire overnight. 

Managers do not earn more than $200,000/year. We are going to some of the salary scales of popular chain franchises in the United States from Walmart, Kroger 

Walmart Store Manager Salaries 

As seen on indeed.com 

  • Actual range of base pay – $32,903 – $194,446 (average $100,076)
  • Cash bonus – $42k to $141k (average $71,943)
  • Stock bonus –$1k to $16k (average $1,321)
  • Profit-Sharing – $1k to $26k (average $3,531)
  • Commission-Sharing – $1 to $204 (average $102)

Remember that these figures are reported by store managers and it’s an estimate, not the actual figure earned/year. Use the information with discretion. 

Kroger Store Manager Salaries 

  • Actual range of base pay – $31k – $122k (average $81,000)
  • Cash bonus – $1k to $41k (average $20,000)
  • Stock bonus –$110 to $16k (average $5,000)
  • Profit-Sharing – $1k to $26k (average $2,578)
  • Commission-Sharing – $7 to $7k (average $6,946)

Conclusion 

Finally, If you have plans on opening a grocery store – You should know that it comes with a lot of responsibilities, and cash upfront. It’s a marginal business and you have to try as much as possible to get profitable margins at about 2-3% to be profitable. 

There are a lot of expenses associated with opening a store that ranges from employees, labor costs, insurance, etc. 

As I’ve recommended, adding household items and beauty products have higher margins at about 10% or more if you are buying in bulk from the supplier. 

A grocery owner can make good cash from $60,000 – $300,000 depending on the many factors mentioned in the article. Sure, you won’t be a millionaire in a year, it takes dedication and work, if you are ready for the challenge then it’s worth it.

Wish to hear good reports from you when you open your store. Cheers! 

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