Convenience Store Product Mix: Profit Per Square Foot
Which products make money and which waste valuable space?
In convenience retail, space is money. Every shelf must earn its keep. UK convenience stores averaging 800-1,200 square feet must carefully select products that balance customer needs with profitability.
Category Performance: What Sells Best
| Category | % of Sales | Average GP% | Recommended Space |
|---|---|---|---|
| Tobacco | 35-40% | 8-12% | Behind counter only |
| Alcohol | 15-20% | 22-28% | 15-20% of floor space |
| Confectionery | 8-12% | 28-35% | 10-15% |
| Soft Drinks | 6-10% | 25-32% | 8-12% |
| Grocery | 12-18% | 20-28% | 20-25% |
| Chilled Food | 8-12% | 28-35% | 10-12% |
| Newspapers/Lottery | 5-8% | 5-12% | Counter area |
Key insight: Tobacco drives footfall but low margin (8-12%). Confectionery and alcohol make the actual profit (25-35% GP).
High-Margin Products to Stock More Of
Coffee (bean-to-cup machine)
Margin: 85-92%
£3 cup costs 25-40p. Repeat purchase item.
Greeting cards
Margin: 60-75%
Impulse buy. No wastage. Takes little space.
Phone accessories
Margin: 45-65%
Chargers, cases. High margin, low theft risk.
Bakery items (fresh)
Margin: 40-55%
Morning trade. Draws customers in. Pair with coffee.
Energy drinks (cans)
Margin: 35-45%
Young demographic. High frequency purchase.
Meal deals
Margin: 30-40%
Bundle sandwich + drink + snack. Increases basket size.
Products to Reduce or Remove
Newspapers
Low margin: 5-8%
Very low margin. Keep only if drives tobacco/lottery sales. Consider dropping.
Budget own-brand items
Low margin: 10-15%
Low margin, compete with supermarkets poorly. Stock branded mid-tier instead.
Slow-moving frozen items
Low margin: 18-25%
Ties up freezer space. Stock fast movers only (ice cream, chips, pizzas).
Large pack sizes
Low margin: Same as small
Customer want small packs. 4-pint milk sits for days. Stock 2-pint.
Conclusion
Product mix optimization is ongoing. Review sales data monthly, remove slow movers, test new high-margin items, and allocate space to winners. The goal: maximize profit per square foot, not just sales volume.
Optimize All Your Costs
Product mix is one cost to optimize. Card processing fees are another where most shops overpay.
Compare Card Machine Rates