Caroline Weaver, owner of New York City’s The Locavore Variety Store, is pulling back the curtain on what it costs to operate a store in one of the most expensive cities in the world.
In a two-part series on Instagram and TikTok posted earlier this month that’s racked up nearly 300,000 views and 4,500 shares on social media, Weaver reveals her store in Manhattan’s Greenwich Village neighborhood has to generate at least $80,000 in sales every month to break even. It has over $31,000 in fixed costs per month, encompassing labor, and an average 40% profit margin on the merchandise it carries.
An offshoot of New York City shopping directory The Locavore Guide opened in June, 650-square-foot The Locavore Variety Store sells goods from over 150 brands headquartered within 100 miles of New York City, including beauty brands The New Savant, Alder New York, Goldie’s, Amphora Parfum and Brooklyn Grooming. In September, it rung up $38,600 in gross sales and yielded profits of about $13,400 after taxes and fees were deducted. Its losses for the month were roughly $18,300. On Instagram, Weaver discloses she pays herself a minimum salary to receive healthcare, and that isn’t figured into the total.
In the first of the two-part social media series Weaver entitled, “The Cost Of Doing Business (In New York City!),” she says, “Even shops that optically look like they have their shit together are having a hard time making a profit.”
On one of Weaver’s TikTok videos breaking down The Locavore Variety Store’s costs, Priscilla Jiminian, founder of skincare brand Skinergy Beauty, writes, “This is the reality of having a business that no one is being honest about! 2024 has been horrible for my business. Thanks for sharing this.”
The store’s tight financial reality reflects broad struggles that small shops around the country face. Declining sales, increased competition and burnout have triggered many to close. The rising cost of rent, specifically, is a weighty burden for small retailers to shoulder.
According to a September survey of over 3,400 small business owners conducted by business networking platform Alignable, 48% report they’re struggling to pay rent. The survey found that the cost of rent increased for 57% of small business renters from six months ago. On an Instagram post from Weaver, New York City refill shop A Sustainable Village comments, “My rent is $4532/m for 200 sqft. My average sale is $30; I’m just burning away money until I close shop.”
Large retail chains aren’t immune to market pressures. Retail data provider Coresight Research estimates store closures in the United States increased 60% in the first week of November versus last year, the highest level since the pandemic. The chains Dollar Tree, CVS, Rite Aid and Rue2 led in store closures.
To cover brick-and-mortar costs, Weaver notes in her series that the majority of shop owners either empty their pockets or accumulate debt, and they can fall into credit card debt and default on loans. “It typically costs a minimum of $40,000 to open a shop,” she says. “Most shop owners get a loan or fund this themselves, and because no business is immediately profitable, they must also factor in losses because the average small business takes about two to three years to become profitable.”
For a store to achieve profitability, Weaver emphasizes, “It’s vital to have an additional income stream like wholesaling your own products, providing service or prioritizing paid partnerships and collaborations. Most shops have online stores, too, which is pretty necessary for survival, but it’s also like running an entirely separate business and adds on additional expenses and isn’t always as profitable as you might think.”
Despite the expense of brick-and-mortar operations, beauty brands have been opening branded stores as they seek their own spaces for sales and exposure as major retailers constrict selections and the cost of digital customer acquisition remains elevated. Commodity, Zodica Perfumery, D.S. & Durga, Jones Road, Elorea and Ceremonia have opened stores to capture customers in environments where they can control the experience.
“The bottom line is you have to be a little delusional to open a new shop these days,” says Weaver. “The risk is great, and you have to be OK with playing a long game. Yet, people still do it and they do it because they really believe that they have something unique to offer their communities.”
This story was updated with new information on Monday, November 25.
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