RETAIL MARKETING OF MEATS 63 
higher by an amount sufficient to pay the additional expense of de- 
livery service, leaving to him approximately the same net profit as 
if his business was conducted on a carry basis. Among chain systems 
also, those selling meats only show approximately the same net profits 
in the carry and in the delivery groups. (See fig. 6.) 
Gross Margin, Net Profit, Wages, and Other Expenses in Carry and Delivery Stores 
PERCENTAGE OF NET SALES 
GROSS MARGIN ? '0 15 
INDIVIDUAL MARKETS 
Carry Stores 1 7. 9 
Delivery Stores - - 1 9. 6 3 
CHAIN STORE SYSTEMS 
Carry Systems 17.37 
Delivery Systems- 1 9.9 3 
Fig. 6. — Gross margin or spread between sales at retail and cost of goods at wholesale is 
greater in delivery stores than in carry stores by approximately the difference in total 
expenses. In consequence the net profit in the two groups is approximately the same. 
In chain-store systems substantially the same comparative relationship prevails as in 
individual markets 
EXPENSES AND PROFITS BY SIZE OF STORES 
The gross margin or spread between cost of merchandise and sales 
for the stores with family trade was larger by from 2 to< 3 per cent 
of sales in the groups of stores with small sales than in those with 
larger sales. The difference in operating expenses between the smaller 
and larger stores was somewhat greater, with the result that net 
profits were a little more than 2 per cent in the smaller stores and 
somewhat more than 2.5 per cent in the larger stores. ( See Table 28.) 
Since the division between the salary of the manager-owner and 
his net profit, particularly in the smaller stores, is necessarily an 
arbitrary one, it is desirable to* consider what is the amount received 
by him as both salary and net profit. In the small one-man store with 
annual sales of $20,000 per year, the amount of estimated wage or 
salary is 8 per cent, or $1,600. With an additional net profit of 2 per 
cent of the amount of sales, the manager-owner received in 1919 a 
total net return for his labor, skill in management, and the risk in- 
curred of approximately $2,000. For the manager-owner of a store 
with sales of $40,000, perhaps requiring the additional labor of one 
employee, the estimated salary of $2,200 and an additional 2 per cent 
of the amount of sales makes a total of $3,000. For sales- of $80,000, 
the estimated salary of $2,800 and an additional net profit of 2.5 per 
cent on sales makes a total of $4,800, as the entire return to the mana- 
ger-owner from the business, aside from rent and a, fair interest re- 
turn on the capital invested. For a concern with sales of $200,000 
and a staff of perhaps 8 or 10 employees, the estimated salary of the 
manager-owner is $3,500 and the net profit of 2.5 per cent is $5,000, 
making a total return of approximately $8,500. 
EXPENSES AND PROFITS BY SECTIONS OF THE COUNTRY 
The percentage relationship of operating expenses, and particu- 
larly of gross margin to sales, was found to be appreciably larger in 
the southeast and Pacific coast sections than in the northeast and 
