62 
BULLETIN 1317, U. S. DEPARTMENT OF AGRICULTURE 
total retailer's margin was 19.02 per cent of the volume of his business 
as measured by sales, 80.98 per cent being the cost of meats at whole- 
sale. This margin includes expenses of 16.65 per cent and net 
profits of 2.37 per cent. Among the more important items of operat- 
ing expenses were : salaries and wages 10.32 per cent, rent 1.33 per 
cent, refrigeration 0.78 per cent, wrappings 0.75 per cent, interest 
0.51 per cent, and advertising 0.20 per cent. Salaries and wages 
constituted 61.98 per cent of the total operating expenses, rent 7.99 
per cent, refrigeration 4.68 per cent, wrappings 4.50 per cent, interest 
3.06 per cent, and advertising 1.26 per cent. (See Table 33.) 
Table 33. — Percentage relation of the various items of expense to total net 
sales, total margin, and total expenses 
Item 
Net sales 
Cost of merchandise sold. 
Gross margin 
Net profit .-- 
Total expense 
Salaries and wages 
Advertising 
Wrappings 
Refrigeration 
Heat, light, and power... 
Rela- 
Rela- 
Rela- 
tion to 
tion to 
tion to 
net 
gross 
total 
sales 
margin 
expense 
Per cent 
Per cent 
Per cent 
100. 00 
80.98 
19.02 
100. 00 
2.37 
12.46 
16. 65 
87.54 
100. 00 
10.32 
54.26 
61.98 
.20 
1.05 
1.20 
.75 
3.94 
4.50 
.78 
4.10 
4.68 
.28 
1.47 
1.68 
Item 
Telephone:. 
Rent 
Interest 
Depreciation 
Repairs 
Insurance 
Taxes 
Losses from bad debts... 
Other expense 
Rela- 
Rela- 
tion to 
tion to 
net 
gross 
sales 
margin 
Per cent 
Per cent 
0.18 
0.95 
1.33 
6.99 
.51 
2.68 
.45 
2.37 
.16 
.84 
.10 
.53 
.10 
.53 
.21 
1.10 
1.28 
6.73 
Rela- 
tion to 
total 
expense 
Per cent 
1.08 
7.99 
3.06 
2.70 
1.26 
7.69 
EXPENSES AND PROFITS BY CLASS OF SERVICE 
. The difference in operating expenses between carry stores and de- 
livery stores, weighted average for all individual markets, was 1.88 
per cent of net sales. (See Table 28.) The delivery expense in de- 
livery stores was 2.57 per cent of net sales. Since the comparison of 
carry and delivery is of two entirely different sets of stores, and since 
the segregation of delivery from other expenses could not be perfectly 
accurate, these two sets of figures should be taken as a rough indica- 
tion that delivery expense when distributed over the entire business 
of the concern was on an average approximately 2 or 2.5 per cent of 
the amount of net sales. As already stated, the expense of delivering 
each order was probably more, nearly 7 per cent, and if all orders 
were delivered it could probably be accomplished for approximately 
5 per cent. 
The difference in gross margin between carry and delivery stores 
was also approximately 2 per cent. Since the gross margin is the 
difference between the amount paid for meats and the amount for 
which meats and waste products are sold, it appears that the spread 
between wholesale and retail prices in delivery stores is approxi- 
mately 2 cents in the dollar of sales greater than in carry stores. If 
the dealer attempts to adjust his prices strictly according to the ser- 
vice rendered, his prices should be approximately 7 cents in the dollar 
higher for the delivered order than for the one carried by the 
customer. 
Net profit is approximately the same in carry and in delivery stores. 
In general, the retailer furnishing delivery service makes his prices 
