15 Most Profitable Items in a Grocery Store

Most grocery stores have a relatively low profit margin of 1-3%, so stocking your store with money-making items is the key to a successful business. If you’re not sure which products are best, this guide to the 15 most profitable items in a grocery store will help you select revenue-generating merchandise that will improve your bottom line.

Cheese

With a profit margin of about 35%, cheese is one of the most profitable items in a grocery store. Although having a good variety of well-known, everyday cheeses like American and domestic cheddar is always a good idea, be sure to include exotic, imported options like Italian Parmesan, Greek feta and French brie since you can charge more for those.

Deli Meat

According to a Yahoo Finance article, the global deli meat market is expected to grow at a compound annual growth rate of 7.78%, reaching almost $77 billion by 2027. With such tremendous growth expected, deli meats are sure to be good money-makers for supermarkets since people who are looking for quick and easy sources of protein are willing to pay more.

High-Quality Produce

Whole Foods, a store known for its excellent produce, enjoys a 30% gross profit margin that’s far above the industry average. Although the chain sells many niche and organic products as well, there’s no doubt that good produce has contributed to the brand’s success. So, if you want to maximize profitability, ensure your fruits and vegetables are quality–and charge accordingly.

Prepared Foods

In a recent PYMNTS survey, 60% of respondents with incomes over $100,000 said they had bought a prepared meal from a supermarket in the past year. Considering that affluent customers are more likely to buy prepared foods, you can charge a higher markup on things like premade sandwiches and pre-cut vegetables, making them very profitable for your grocery store.

Frozen Foods

Frozen foods can also be great money-makers for supermarkets. While they offer the same convenience as prepared foods, they have a much longer shelf-life, reducing loss due to spoilage. If you really want to take advantage of this category, be sure to offer a variety of products, such as frozen meals, potatoes, fruits, pies and ice cream.

Paired Items

Salespeople in many industries suggest offering complementary products together in order to boost revenue, so be sure to use the same tactic in your grocery store. For example, displaying salad dressing near salad kits, cranberry sauce alongside boxed stuffing or wine next to charcuterie boards is a subtle way to encourage customers to spend more money.

Bodycare & Cosmetics

Most consumers want to buy as many things as possible at one store, so be sure to charge a high markup on items like toothpaste, soap and makeup since you’ll be saving shoppers from a trip to the pharmacy. Also, unlike fresh meat and produce, bodycare and cosmetic products have long shelf-lives, so it’s unlikely that spoilage will cut into profits within this category.

Hardware

Similarly, items like batteries, lightbulbs, nails and hammers can also be very profitable because shoppers are willing to pay a bit more for the convenience of not having to go to another store. However, if you’re going to stock these items, make sure your staff members know a bit about them so they can answer customers’ questions.

Bulk Foods

With a profit margin of 10-30%, the lack of packaging and ease of transportation makes bulk foods very profitable for grocery stores. Be sure to offer a variety of dried fruits and nuts since these healthy options attract affluent consumers who tend to spend more. If you really want to make money, encourage shoppers to bring their own bags so you can reduce that cost.

Coffee

Coffee connoisseurs are serious about their morning cup of joe, so you can charge a bit more for high-quality coffee than you can for other items in your grocery store. Make sure you carry light and dark roasts, instant and ground and regular and decaf so you can appeal to as many customers as possible.

Spices

A FinModelsLab.com article states that spice shops typically have a net profit of 5-15%. Combined with the projection that the US spice market will reach $12.2 billion by 2026, it’s clear that spices can be good money-makers for supermarkets, especially since loss due to spoilage is usually minimal. 

Cereal

Cereal has some of the highest markups among grocery store items: the average is about 28%, but some brands are sold at an astonishing 42% markup. Since most cereals have a prolonged shelf-life that reduces the risk of loss due to expired inventory, make sure you have a good supply of cereal in your store.

Bottled Water

With a long shelf-life and consistent demand, bottled water can be one of the most profitable items in a supermarket. Large cases of bottled water are especially handy when entertaining, so remember to promote bottled water around the 4th of July, Thanksgiving and other holidays when shoppers will be looking for quick and easy ways to quench their guests’ thirst.

Vitamins

Because supplement retailers typically see profit margins of 30-50%, it makes sense for grocery stores to carry at least some vitamins, minerals and protein powders. As with many of the most profitable items in a grocery store, vitamins are shelf-stable, so you don’t have to worry about losing merchandise to spoilage or increased labor costs due to clearing and restocking shelves.

Over-the-Counter Medications

Over-the-counter medications, especially brand name ones, are another category of shelf-stable products that can be very profitable for a grocery store. As with other pharmacy products, shoppers are willing to pay a bit more for the convenience of not having to go to another store, so be sure to charge an appropriate markup if you want to maximize profitability.

Ways to Maximize Profitability

Although stocking your store with high-margin products is a good first step, there are many other things you can do to make sure your business is successful. So, here are a few ideas to help you maximize the profitability of your grocery store.

Embrace Sustainability

Making your supermarket more environmentally-friendly can not only attract shoppers but also cut costs. For example, instead of throwing away blemished produce, you can market it as “waste-reducing produce” and sell it at a slight discount. You can also encourage customers to bring their own reusable shopping bags, reducing the need for plastic ones that cost you money.

Pleasant Experience

People are more likely to shop at a store that gives them a nice shopping experience. So, make sure your staff performs regular grocery store cleaning and maintenance like restocking shelves, mopping floors and sanitizing restrooms. Besides, if your store looks nice, you’ll be able to charge a bit more for the same products than if your store wasn’t well-maintained.

Minimize Loss

Considering that 30% of supermarket food is discarded, there’s no doubt that grocers lose a lot of money due to damage or spoilage. In order to lower this number and increase profits, be sure to educate staff on the importance of handling fragile produce and other produce with care, as well as maintaining refrigerated display cases.

Carts & Baskets

Everyone knows what it’s like to go into a grocery store “just for a few things,” only to realize you need a shopping cart or basket. If you want to not only help your shoppers carry their items but also encourage them to buy more, try placing carts and baskets throughout the store: when not limited by what they can carry, they’ll be more likely to buy a few extra items that catch their eye.

Café or Coffee Shop

Many grocery stores have a small café, so consider adding one to your store. Besides the money made from the sale of profitable coffee shop items like fancy coffee drinks and gourmet French pastries, the refreshments will encourage your shoppers to stay longer, increasing the likelihood they’ll see something they like or remember something they forgot and buy it.