The margin rate in retail refers to the difference between the cost of goods sold and the selling price of those goods. It is commonly expressed as a percentage and is used to calculate the profitability of a retail business.
The margin rate is an important metric for retailers as it provides insights into their pricing strategy, cost management, and overall profitability. A higher margin rate indicates that a retailer is able to sell their products at a higher price relative to the cost of acquiring or producing them, resulting in greater profitability.
On the other hand, a lower margin rate may suggest that a retailer is engaging in price competition or facing higher costs, which could impact their bottom line.