Retail Rent Percentage Calculator
Calculate rent-to-revenue ratio for retail or restaurant space.
The 5-10% of gross revenue guideline helps determine if your lease cost is sustainable.
Rent as a percentage of revenue is a critical metric for retail and restaurant businesses. It tells you how much of every dollar earned goes toward your lease — and whether your location is financially viable for your business model.
Formula: Rent Percentage = Monthly Rent ÷ Monthly Revenue × 100 Monthly Revenue Needed = Monthly Rent ÷ Target Rent Percentage × 100 Maximum Affordable Rent = Monthly Revenue × Maximum Rent Percentage
What each variable means:
- Monthly Rent — total occupancy cost including base rent, CAM (common area maintenance), taxes, and insurance passed through by the landlord (also called NNN charges).
- Monthly Revenue — total gross sales for the same month.
- Target Rent Percentage — the safe upper limit for your business type.
Industry benchmarks by business type:
- Grocery store: 1–3% (thin margins, high volume)
- Restaurant (casual dining): 6–10%
- Restaurant (fast food / QSR): 8–12%
- Clothing retail: 8–12%
- Shoe retail: 6–8%
- Coffee shop: 10–15%
- Jewelry / luxury retail: 5–10%
- Hair salon / barbershop: 10–15%
- Gym / fitness studio: 10–20%
Worked example: A boutique clothing store pays $5,500/month in rent (including NNN). Monthly revenue is $48,000.
Rent % = $5,500 ÷ $48,000 × 100 = 11.5% — within the 8–12% benchmark for clothing.
If revenue dropped to $35,000: Rent % = $5,500 ÷ $35,000 × 100 = 15.7% — dangerously high; renegotiate or increase sales volume.
Rule of thumb: If your rent percentage exceeds the high end of your industry benchmark for more than 3 consecutive months, it is time to review your pricing, traffic strategy, or lease terms.