Denver Retail Industry

Denver Retail Profit Margin Benchmarks

Denver's $19.29 city minimum wage — among the highest in the Mountain West and indexed annually — pushes retail labor toward the upper end of the 10–20% benchmark, while the 8.81% combined sales tax adds friction at the register. RiNo and LoHi retail rents of $25–32/sqft keep occupancy near 8–10% of sales, though emerging corridors run $18–24/sqft. A fast-growing, high-altitude metro with strong outdoor-recreation and cannabis-adjacent retail gives Denver a distinct category mix and net margins of 2–5%.

Denver startup costs →Gross margin calculator

Gross Margin

43%

range: 35–52%

Net Margin

range: 1–5%

Labor Cost

17%

range: 13–21%

Occupancy Cost

range: 6–11%

Typical revenue: $220,000 – $3,000,000/year for independent Denver retailers · Keystone markup: 50–115% (avg 80%)

Denver Labor Snapshot

City minimum wage

$19.29/hr (Denver city, no tip credit)

State: $14.81/hr (Colorado state, 2025)

General sales tax

~8.81% combined (CO state + Denver city/RTD/county)

Key note

City wage indexed annually. Colorado flat 4.4% income tax on owner profit.

Cost drivers in Denver

1$19.29/hr Denver city minimum wage (no tip credit), indexed annually — well above Colorado's state floor
28.81% combined sales tax (state + Denver city/RTD/county) raising shelf prices
3Retail rent $25–32/sqft in RiNo/LoHi, $18–24/sqft on South Broadway/Colfax
4Outdoor-recreation gear and cannabis-adjacent retail give Denver a high-margin specialty mix
5Rapid in-migration expands the customer base but tightens commercial vacancy
6Colorado state income tax applies to owner profit (flat 4.4%)

Denver Market Overview

Estimated retail stores

6,900

Commercial rent

$25–32/sqft (RiNo/LoHi), $18–24/sqft (South Broadway/Colfax)

General sales tax

~8.81% combined (CO state + Denver city/RTD/county)

Special fees / taxes

Colorado flat 4.4% income tax on owner profit

What makes Denver different

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Denver's $19.29 city wage is 2–3 dollars above Colorado's state minimum — budget retail labor at the city rate, which compounds annually with indexing.

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Outdoor-recreation retail (apparel, gear) commands premium markups in Denver that few inland metros support, lifting blended gross margin.

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The 8.81% sales tax pushes some big-ticket shoppers to lower-tax surrounding counties — consumables and impulse retail are insulated.

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RiNo's arts-district traffic justifies $25–32/sqft for design-forward concepts; emerging corridors at $18–24 offer a lower-risk entry.

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Colorado's flat 4.4% income tax taxes owner profit, unlike no-income-tax metros — factor it into take-home projections.

Frequently asked questions

What is the minimum wage for retail workers in Denver?+

Denver's city minimum wage is $19.29/hr in 2025, indexed annually for inflation, with no tip credit. This is higher than Colorado's statewide minimum. Denver retailers must pay the city rate, which rises automatically each January.

How much is sales tax on retail in Denver?+

Denver's combined general sales tax is approximately 8.81% (Colorado state + Denver city, RTD transit, and cultural-district taxes). Most tangible goods are taxable. The rate is high enough that some shoppers make big-ticket purchases in lower-tax surrounding counties.

How much does it cost to open a retail store in Denver?+

A typical Denver storefront costs $85,000–$260,000 to open: lease deposit and first months' rent ($9,000–$26,000 for 1,200 sqft at $18–32/sqft), build-out and fixtures ($32,000–$100,000), inventory ($22,000–$78,000), POS and security ($5,000–$15,000), and Colorado/Denver licenses. The $19.29 city wage means pre-opening payroll runs higher than in low-wage metros.

Why are Denver retail margins under pressure?+

The $19.29 city minimum wage pushes labor to 13–21% of sales, and the 8.81% sales tax suppresses big-ticket demand. Net margins typically land at 2–5%. Denver retailers offset this with high-margin specialty categories (outdoor gear, cannabis-adjacent goods) that the local market uniquely supports.