Smart Price Ladder
| Price Point | Sell (Inc) | POR % |
|---|
| Name | Case £ | Pack | Unit Cost | Sell (Inc) | VAT % | POR % | Profit/Case | Wkly Qty | |
|---|---|---|---|---|---|---|---|---|---|
| TOTALS: | - | £0.00 | 0 | ||||||
| TOTAL WEEKLY PROFIT: | £0.00 | ||||||||
*Your list is saved automatically on this device.
How the POR Calculator Works
This tool allows UK retailers, wholesalers, and convenience store owners to accurately calculate Profit on Return (POR), margins, and unit profitability. It is designed to handle UK VAT rules automatically.
- Input your costs: Enter the price you pay for a case and how many items are in it.
- Select VAT: Choose standard (20%), reduced (5%), or zero-rated (0%).
- Set Selling Price: Enter your shelf price (inc VAT) to see your profit.
- Target Mode: Use the "Target POR" tab to find the selling price needed to hit a specific percentage (e.g., 25%).
POR Formula and Calculation
Profit on Return is calculated based on the selling price excluding VAT. This is different from markup, which is based on cost price.
Example: You buy a drink for £0.50 (Ex VAT). You sell it for £1.00 (Ex VAT).
Profit = £0.50.
POR = (£0.50 ÷ £1.00) × 100 = 50%.
POR vs Margin vs Markup
In the UK retail trade, "Margin" usually refers to POR (Profit on Return). However, "Markup" is calculated on the cost price. It is crucial not to confuse them, or you may underprice your products.
- POR (Margin): % of the selling price that is profit. (Always lower than markup).
- Markup: % added to the cost price.
Typical Target POR Ranges
While every business is different, here are typical indicative ranges for convenience retail sectors:
| Category | Target POR Range |
|---|---|
| Tobacco / E-cigs | 6% - 15% |
| Alcohol | 15% - 25% |
| Groceries / Soft Drinks | 25% - 35% |
| Confectionery / Snacks | 30% - 45% |
| Food to Go / Coffee | 50% - 70% |
Frequently Asked Questions
What is POR (Profit on Return)?
POR stands for Profit on Return. It represents the percentage of the selling price (excluding VAT) that is actual profit for the retailer. It is the standard profitability measure in the UK convenience sector.
What is the difference between POR and Markup?
POR is profit calculated as a percentage of the selling price. Markup is profit calculated as a percentage of the cost price. POR will always be a lower percentage than markup for the same cash profit. Retailers typically use POR to ensure they make enough margin on the final sale price.
Should I calculate POR using Ex VAT or Inc VAT prices?
Always use Ex VAT prices for the calculation formula. VAT is a tax collected for the government, not your profit. This calculator automatically strips VAT from your "Inc VAT" shelf price inputs to give you the correct result.
What is a "good" POR target for a convenience store?
This varies by category (see the table above). Generally, aim for 20-25% on alcohol and 30-35% on soft drinks and confectionery. Fresh food and coffee often command higher margins (50%+), while tobacco is much lower (6-10%).
How do I find a selling price for a target POR?
Use the "Target POR Mode" tab above. Enter your unit cost price and desired percentage (e.g., 30%), and the tool will calculate exactly what price to put on the shelf to achieve that margin.
What does RRP mean and do I need to follow it?
RRP stands for Recommended Retail Price. It is a suggestion from the manufacturer. You are generally free to set your own prices unless the product is a "Price Marked Pack" (PMP) where the price is printed on the packaging.
Why does rounding (e.g., £1.99) change my POR?
Rounding down from a mathematically "perfect" price (e.g., £2.03 to £1.99) slightly reduces your cash profit, which lowers the POR percentage. However, psychological price points like .99 or .50 often increase sales volume, which can lead to higher overall weekly profit.
Does this tool save my product list?
Yes. The Multi-Product List saves automatically to your browser's local storage. You can close the window and come back later, and your list will still be there (unless you clear your browser cache).
Can I export my calculations?
Yes. In the "Multi-Product List" tab, click the Download CSV button to save a spreadsheet of your calculations, which you can open in Excel or Google Sheets.