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# Retail Industry: Sales and Margins
- URL: https://www.benchmarkanalytics.com.au/where-does-100-of-retail-sales-actually-go/
- Published: 2026-09-19T20:45:57.000Z
- Updated: 2026-09-19T20:45:56.000Z
- Description: A $100 clothing sale leaves a $56 retail margin. A $100 new-car sale leaves just $6.50. New ABS data reveal how dramatically retail economics varies by product.
- Author: Nick Hossack
- Tags: Retail Industry, Retail Margins, Retail Sales, Profits, Australian Economy

When you spend $100 at a retailer, very little of that money is profit.

New ABS data provide an unusually detailed look at what happens to the retail dollar by measuring the **retail margin** — the difference between what a retailer receives from selling a product and what it paid for that product.

The differences between products are enormous.

For **clothing**, the retail margin is 56 per cent. Put simply, from $100 of clothing sales, about **$44 represents the cost of the goods being sold and $56 remains as the retailer’s margin**.

Furniture has a margin of 43.6 per cent, fresh fruit and vegetables 35.4 per cent and dairy products 31.1 per cent.

Cars work very differently. For every $100 of new-car sales, around **$93.50 represents the cost of the vehicle and just $6.50 is the retail margin**. Petrol has a margin of 12.8 per cent.

But that remaining margin is **not profit**.

It is the pool of money from which a retailer must pay the costs of actually operating the business: employee wages and superannuation, rent, electricity, insurance, advertising, warehousing, transport, payment processing, depreciation, administration and numerous other expenses. What remains after those costs ultimately determines profit.

This explains why comparing businesses simply by their sales can be misleading.

Australian clothing retailers recorded $33.4 billion of sales in 2024–25 and generated $18.7 billion of retail margin. New-car sales were even larger at $39.9 billion, but generated only $2.6 billion of retail margin.

Retail economics therefore differs enormously by product.

A dollar of clothing sales and a dollar of car sales may look identical in a revenue statement. Economically, they are very different dollars.

| Where does $100 of retail sales go?                                                                                                                              |               |               |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------- |
| Cost of goods is what the retailer paid for the product. Retail margin is what remains before wages, rent and other operating costs are paid.                    |               |               |
| Product                                                                                                                                                          | Cost of goods | Retail margin |
| Clothing                                                                                                                                                         | $44.00        | $56.00        |
| Furniture                                                                                                                                                        | $56.40        | $43.60        |
| Cosmetics                                                                                                                                                        | $63.30        | $36.70        |
| Fresh fruit & vegetables                                                                                                                                         | $64.60        | $35.40        |
| Dairy products                                                                                                                                                   | $68.90        | $31.10        |
| Pharmaceutical goods                                                                                                                                             | $73.50        | $26.50        |
| Automotive petrol                                                                                                                                                | $87.20        | $12.80        |
| New cars                                                                                                                                                         | $93.50        | $6.50         |
| **Important:** retail margin is not profit. The margin must still cover wages, rent, logistics, utilities, marketing, depreciation and other operating expenses. |               |               |
| Source: ABS, Wholesale and Retail Industries, 2024–25\.                                                                                                          |               |               |