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BAM Consulting Monthly Business Focus

Updated: Jun 1, 2020

April 2020: Deli Restaurants

The Deli Restaurants with Limited Service-Fast Food in Midland continues to remain sustainable for the past three years, creating moderate sales volumes. The growth is promising while illustrating a baseline of 15M in 2016 while increasing annually to 24M ending fiscal year 2019. The local market is outperforming national levels suggesting a sustainable market with 65% in market sales during the same time frame. The average employee requirement typically for operation remains steady with 12 and for smaller businesses projecting three bases on average employment in the market area.

The startup rate on a national average is stable and consistent, while Midland experienced a spike with an 11% startup rate in 2017 while experiencing a moderate decline in 2018 and 2019 measuring 67% slowing. The results in Midland seemingly is being squeezed by franchisees signifying brand loyalty. Many businesses are owned by the median age of 31 – demonstrating a robust segment between 25-34, earning a median income of $78,000 and on the national average while Midland remains probable with higher revenue.

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Deli restaurant margins typically operate at a 60% to 75% return. However, there are several significant variable pricing considerations, as the margin largely depends on the product mix. In many cases, sandwiches produce approximately a 50% to 62% percent margin, while meats and cheeses sold in service delis bear 40% to 50%.

If you are interested in starting a deli restaurant, there are several tangible types of equipment and required inventory to generate menu items representing an explicit concept. Also, the marketing efforts should subjectively target an audience essential to the food-related items that define the demographics. Although various revenue streams are not considered in this evaluation, additional items may consist of a bakery and wine bar to cultivate a greater market space.

Because of cost, the average startup restaurant fluctuates from a few thousand reaching several million. According to a current survey, the median price associated with opening a restaurant is $275,000 or $3,046 per seat. If you are the owner of a building, it's suggested that the "median" cost is $425,000 or $3,734 per seat.

If a Deli Restaurant is something you are interested in and would like to investigate the possibilities, or if you have a business you want to know more aboutemail us as we can assist in your opportunity and may consider your idea for our next "Monthly Business Focus."

Research Data elements include:

  • IRS SOI Corporation Tax Book

  • IRS Statistics of Income

  • US Economic Census

  • US Census Quarterly Financial Reports

  • US Census County Business Patterns

  • Bureau of Labor Statistics Monthly Employment Reports

  • Bureau of Labor Statistics Monthly Unemployment Reports

  • Bureau of Labor Statistics Annual Wage Survey

  • Bureau of Labor Statistics Industry Productivity Reports

  • Bureau of Labor Statistics Price Indices

  • Bureau of Labor Statistics Consumer Price Index

  • National Agricultural Statistical Service

  • US Census Quarterly Financial Reports

  • US Census Retail Trade Report

  • InfoGroup, Inc.

  • Business Valuation Resources

  • American Community Survey

While 100% of firm coverage is desirable for analysis purposes, the most significant value of BAM Consulting reports rests in discerning patterns of activity, which reflect in the large samples used to develop. The overall current coverage of the databases surpasses 13-million active business operations at any point in time.

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