---
title: "What Gross Margins Should Supermarkets Set for Different Product Categories?"
description: "How to balance sales volume and gross margin? Supermarkets carry a wide range of products, and each department and category has different gross margins. Generally, food margins are relatively low, general merchandise margins are higher, and fresh produce is not profitable but is used to drive foot traffic. As a popular saying in the industry goes: 'Food drives sales, general merchandise drives margins, and fresh produce drives foot traffic.' The key is to pursue high gross profit amounts, not high gross margin percentages."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-10-24"
categories: "Dealer Operations, Retail Formats"
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---

# What Gross Margins Should Supermarkets Set for Different Product Categories?

> How to balance sales volume and gross margin? Supermarkets carry a wide range of products, and each department and category has different gross margins. Generally, food margins are relatively low, general merchandise margins are higher, and fresh produce is not profitable but is used to drive foot traffic. As a popular saying in the industry goes: 'Food drives sales, general merchandise drives margins, and fresh produce drives foot traffic.' The key is to pursue high gross profit amounts, not high gross margin percentages.

How to balance sales volume and gross margin?
Supermarkets carry a wide range of products, and each department and category has different gross margins.
Generally, food margins are relatively low, while general merchandise margins are higher. Fresh produce is not profitable; it is only used to attract customers. This is because fresh produce has high spoilage rates and also requires significant packaging materials. Therefore, many supermarkets choose not to operate fresh produce departments themselves to avoid risks and reduce losses.
As a popular and practical saying in the industry goes: "Food drives sales, general merchandise drives margins, and fresh produce drives foot traffic."
Generally, well-known brands have lower margins but higher sales volumes. The reason prices cannot be negotiated down is that the prices of well-known brands are highly transparent, leaving little room for profit. If we persistently pursue high gross margins, it will inevitably affect sales volume, thereby reducing our gross profit amount. When volume increases, the gross profit amount naturally rises.
**Many operators fall into a misconception: they persistently pursue high gross margin percentages while neglecting that the gross profit amount is the real profit.**
Some large supermarket chains have comprehensive gross margins of less than 6%, but their sales are very high.
If we pursue high gross margins, it will inevitably lead to a decline in sales, and at the same time affect the gross profit amount.
When the gross margin point is low, sales are high, and the gross profit amount also rises. When the gross margin point is high, sales decrease, and the gross profit amount also decreases. This is an iron, unchanging market rule.
**Therefore, supermarkets must establish a basic price image; the gross margin point should not be too high and must conform to market operation rules.**
Thus, **we should pursue a high gross profit amount, not a high gross margin percentage**. Only by establishing a price image can we achieve high sales volume, and thereby obtain a high gross profit amount, which is profit.
Appendix: Gross Margin Reference Table for Supermarket Departments
1. Fresh Produce Department Gross Margin Table
Vegetables: 3%-5%
Fruits: 4%-7%
Poultry: 5%
Beef, mutton, and pork: 4%
Eggs: 5%
Deli and bakery: 8%-12%
Low-temperature foods: 8%-12%
Food: 8%-11%
Frozen foods: 8%-12%
Fresh seafood: 7%-11%
Ice products: 10%-13%
Dried goods (north-south): 9%-13%
Coarse grains: 10%-14%
Sauces: 10%-13%
2. Food Department Gross Margin Table
White liquor: 11%-14%
Red wine: 10%-15%
Carbonated drinks: 8%-12%
Juice drinks: 8%-12%
Tea drinks: 8%-12%
Energy drinks: 10%-14%
Dairy products: 12%-17%
Water beverages: 12%-18%
Milk powder: 13%-16%
Rice flour: 13%-16%
Solid drinks: 12%-16%
Nutritional products: 15%-18%
Health products: 18%-22%
Candy: 15%-20%
Preserved fruits: 13%-15%
Cookies: 12%-16%
Puffed snacks: 10%-15%
Dried meat: 12%-16%
Instant food: 8%-15%
Pickled vegetables and hot pot bases: 12%-18%
Canned food: 12%-18%
Powdered seasonings: 10%-15%
Liquid condiments: 8%-12%
Dried vegetables: 12%-18%
3. General Merchandise Department Gross Margin Table
Shampoo: 13%-20%
Hair care: 13%-21%
Skin care and facial cleansers: 15%-22%
Toothpaste and toothbrushes: 10%-16%
Soap: 10%-15%
Household cleaning products: 5%-8%
Disinfectants and pest control: 12%-18%
Leather care: 10%-15%
Fabric softeners: 8%-12%
Paper products: 10%-16%
Household miscellaneous: 12%-18%
Knitted goods: 14%-20%
Cookware: 10%-13%
Tableware: 12%-15%
Glassware: 10%-15%
Cleaning tools: 10%-15%
The comprehensive gross margin for the above departments is approximately 8%-10%. From the table above, it can be seen that general merchandise has a higher comprehensive gross margin, around 14%, food margins are above 10%, and fresh produce margins are relatively low, at 5%-7%.
-END-
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## Citation metadata

- Publisher: New Distribution
- Author: New Distribution
- Published: 2016-10-24
- Canonical: https://xinjignxiao.com/en/articles/what-gross-margins-should-supermarkets-set-for-different-product-categor-eb0319b1/
- Original source: https://mp.weixin.qq.com/s/b4hEOvPCSJEddTnZ75Gf7Q

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