Are Delis Profitable? How Much Sandwich Shops Make

Are delis profitable? If you’re looking to open one, this is probably the first question you want answered. Many businesses can be profitable, and some may have a larger profit margin possibility. The food sector can be a very profitable career and business. Recent data reported by Statista shows nearly 30% of Americans eat out once a week or more. Another nearly 20% reported eating out once every other week. This shows the potential for a steady flow of customers who could return again and again to your restaurant or deli business.

Understanding Sandwich Shop Profitability

The profitability of delis and sandwich shops (and really most businesses) can vary. There are many factors that can contribute to sandwich shop profitability, from location and management to branding and operational efficiency. Some common costs that could impact a deli’s profitability can be:

• Site construction and development
• Labor costs
• Overhead expenses
• Marketing and advertising
• Cost Of goods sold (COGS)
• Taxes

How Much Do Sandwich Shops Make?

When it comes to how much sandwich shops make, it’s important to consider the overall industry. Again, deli profit margins might range significantly. However, IBISWorld reported in January 2024 that the sub and sandwich industry has, overall in the last five years, had a steady Compound Annual Growth Rate (CAGR) of 1.8%, growing the total revenue to reach an estimated $45.2 billion. The industry analysis firm also reported the specialty food store industry had a revenue of more than $12 billion in 2023.

So, what do these industry numbers mean for you? It means this is likely an industry that could bring profits to your wallet. While every store may have a different profit trajectory, the industry as a whole seems healthy and profitable, paving the way for your success.

Are Delis Profitable as Part of a Franchise?

Some business professionals and experts say owning a business as a franchisee can help reduce overall risk, and this can include delis. The support, brand strength, and business model provided by a franchise such as Penn Station East Coast Subs can help tilt the scales in favor of profitability. Franchisees get to utilize established systems, support, and recognition.

A way to check how much a franchise deli or sub-shop may make is to study the Franchise Disclosure Document (FDD). Item 19 will have a breakdown of the revenue a typical franchisee can make on the high and low end of the spectrum. Item 19s are not required to be disclosed, but it may be smart to ask yourself why a brand would not have a full and complete Item 19.

If you’re opening a sandwich shop, it’s best to do research on your own to see what business opportunities fit your financial situation, and speak to financial advisors and lawyers to understand the possibilities for you.

Sandwich Shop Profits: The Penn Station Franchise Advantage

So, are delis profitable? While the profitability of sandwich shops can vary, partnering with a franchise like Penn Station East Coast Subs can put you on the path to success. Opening a franchise with Penn Station East Coast Subs offers many advantages that can significantly impact your shop’s profitability, including:

• Proven business model
• Comprehensive training and support
• Brand recognition
• Marketing and Branding

With Penn Station, you’re not just opening a deli; you’re starting a business with a brand that supports your growth every step of the way. Interested in exploring franchise opportunities with Penn Station East Coast Subs? Request information today.