Cost to Open a Retail Gift Shop

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Wondering how much does it cost to open a small retail store?

Building your business plan to start a retail gift shop is an exciting step in your entrepreneurial journey. And knowing your fixture and startup costs is essential for a successful beginning, and staying on budget. But, what does that startup budget need to be? Here is an in-depth report on exactly what it costs to open a brick-and-mortar retail store for gifts, clothing boutique, or housewares store.

Use this handy guide to help you with the startup budget. With everything from initial fixture costs to renovations, depending on the size of the store you intend to open, the prices can vary widely.

Average costs for the equipment to start a retail store range from $3,000 to $30,000+ plus. There will be significant additional costs for retail space rental, construction, inventory, and a website. These costs will vary considerably by your location and the size of your store.

Most retail store locations (commercial properties) are empty and require renovations when you first move into your business. Seldom is the location already set up the way you’d like. There are several fixtures and even improvements that will likely be required to facilitate a pleasant shopping experience for your customers in your new retail store.

In this guide, we’ll discuss the startup fixture costs for opening a retail store. Most small startup gift shops are between 500 and 1000 square feet. For not getting out of hand, we’ll look at a modest 500 square foot location. Know that your costs will be dependent upon the size of your retail store startup.

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Retail Store Startup Equipment Costs Estimates

  • Cash Register $250 – $2,000
  • Point of Sale System $230 – $1,000+ per month
  • Front Counter $500 – $2,000
  • Security Equipment $500 – $4,000
  • Signage $200 – $3,000
  • Accent Display Lighting $100 – $1,000
  • Wall Shelving – $500 – $2,000
  • Display Cabinets – $300 – $5,000
  • Standalone Display Centre – $500 – $10,000
  • Communications Equipment – $100 – $1,000

Total costs to open a brick and mortar store = $3,180 – $31,000

As most locations will require renovating, here is a brief list of necessary costs for a 500 square foot space. I am assuming a vacant commercial unit for this article.

Be sure to this guide on how to calculate startup costs for your business here

Retail Store Startup Expenses Explained

Cash Register

Cash is the king as they say, or is plastic the new king? Either way, you will need some form of calculating prices, taxes, and of course, the final sale value of purchases and returns. There are a few options here, depending on how you are setting up your payment solutions.

If you’re looking for a simple cash register that will do the majority of your functions, start at $600 and can go up to thousands depending on the features.

Many small businesses will use a cash drawer and a POS system instead of a cash register. A typical locking cash drawer will only run you about $100.

Retail Point of Sale System

In today’s age of digital payments, it isn’t enough to just have a cash drawer or register—most people today like to pay with plastic. According to Jason Steele of, in 2020, a survey was completed, which showed that 28% of customers prefer paying with debit cards, 27% chose credit cards, while only 19% prefer to pay with cash.

As our technology moves forward, the number of people who pay with cash will continue to decrease. With this preference, the best way you can provide payment solutions for your clients is with a POS system. These systems allow you to take payment from debit and credit card payment methods.

Keep in mind that most systems require that you open an account and pay per month for the use of the equipment and payment processing software.

Picking up a POS system for your store is an essential task in your startup process. A simple POS system such as Square, for example, can cost as little as a few hundred dollars. You can even get technology that plugs right into your phone or tablet to take payment. Most of this technology requires you to have exterior secure wifi or preferably a corded internet connection.  

Store Front Counter

Most retail stores will require a decent-sized counter. It is where you will install your cash register and POS system. As well, it is a place where customers will set the goods they wish to purchase.

Given that you’re looking at setting up a gift shop, clients may also require items to be gift wrapped. The most efficient means of doing this is to have a large enough counter to address the customer request right at the time and place of exchange.

The cost of a counter for your register and POS will vary depending on the look and features. A professional-looking small bench could cost as little as $300 or as much as several thousand. For a small retail store, I would assume an average cost of about $600, which will get you a fairly nice setup from a store like Ikea or Wayfair. 

Security Equipment

Whenever you are dealing with retail clients, unfortunately, you have to include shrinkage in your budget. The average shrinkage rate in retail is 1.44% to 2% of sales

An excellent way to avoid shrinkage is with a decent security system. You should consider having a CCTV security system that records video and audio and stores the recordings in a safe location for later retrieval. A small shop can typically have one of these systems installed for between $1000 – $3000 for a basic system. If you purchase the equipment and install it yourself, it can range from $500 to $1000 for a basic system with just a few cameras.

Another form of security for retail, which is useful to consider, is using an RFID system. It is a radio wave system that utilizes a special chip to stick onto products like a price tag. Then, at the store exits, you would have a receiving antenna set up, and when someone tries to leave the store with an item where the chip was not de-activated, an alarm would be triggered.

Most RFID systems start at around $600, and the price goes up from there. Installation would drive the price up even more.

It leads us to the last part of the security system, and that is the alarm itself. Most retailers have a security system with a panic button by the cash register. It allows a cashier to hit the switch in case of emergency, theft, or robbery.

The typical alarm system uses sensors that you install to each door and window and a keypad where you input an alarm code. These alarm systems range in price depending on the features, but a basic system can usually be purchased for under $300 if you install it yourself. If hiring a security installation company, it could cost you upwards of $1500 to have a simple system installed.


The face of your store is going to need a sign. Depending on your artistic ability (and available time), you may choose to make this yourself. If you aren’t that creative, then purchasing a sign is required.  

Many small shops have multiple signs. You’ll recognize a standard A-frame sign as these seem to litter city streets outside of entrances to restaurants, bars, small shops like the gift shop you are interested in, and many more types of businesses.  

The size and type of storefront the location you choose will determine the type and size of sign you will need.

A typical sidewalk sign can cost anywhere from $50 to $300, depending on the size and style. Whereas a digital display like you might see used for the interactive maps in a mall, with touch screen technology, these run anywhere from $3000 – $8000. I will assume this would be a bit out of the league that a small retail gift shop would want, but the sidewalk sign is almost essential.

If you intend to use a window vinyl type of sign and simply install it to your exterior glass storefront, it could be as low as $100. However, if you are looking to get a custom backlit storefront sign, you are looking at requiring a budget of at least $1000. If light fixtures are also needed, the cost will likely be much higher.  

Accent Display Lighting

When it comes to retail stores, appearances are everything. You’ll want to have nice-looking displays, shelving, and a nice overall feel to the store. But, what good is a lovely display of products in poor lighting?

Quite often, retail store owners will have two distinct sets of lighting within a store. There is the overall lighting, and then there is specialized display lighting.  

Display lighting might include additional spotlights installed and directed at a particular display or product. It might be ceiling-mounted spotlighting or in-cabinet lighting for those products that you want to keep under lock and a key to avoid shrinkage.

Whichever type of store lighting you decide to utilize, it will cost you something. If you’re looking at only a 500 square foot gift shop, then you’ll maybe only need a few spotlights in crucial areas to highlight a display or particular product shelf or rack. Small and decorative spotlights can cost anywhere from $100 to $1,000, depending on several variables.  

For a small gift shop, I would likely think of budgeting about $500 for a couple of excellent small spotlights for product highlights.

Wall Shelving, Display Cabinets & Standalone Displays


Once you’ve got your store renovated, you need to set up somewhere to display your products. There are all kinds of options here, but we’ll start with basic shelving.

With shelves that install directly to the walls of your store, you can maximize the interior floor space and therefore increase your lease ROI. More places to display products mean more products you can sell to your customers. However, the amount of space you use will depend upon the overall style and image that you want the interior design to portray. 

A chic, high-end gift shop may not want to have products plastered from floor to ceiling. So, the amount of wall shelving you need will depend upon the design of the interior of the store.

If you are purchasing shelves for displaying your products, a good rule to use for budgeting is to assume about $50 to $100 per shelf. Style, size, mounting, and more will all act as variables in determining the shelves’ value, but if you were to budget this amount, you would be on the right path.

Another option to having multiple shelves installed onto a wall is to use a system like a slat wall. It is a large board you install onto the wall with various slats built into the panel. Then you can use slat hooks or slat brackets to mount shelves, small displays, and product hangers directly onto the slat wall. This customizable solution is perfect if you have the notion of making an entire wall or section of the wall into one big display.

Display Cabinets

Display racking and cabinets will cost significantly more than simple shelving. However, for a small gift shop, display cabinets add not only security for you to help avoid theft; but also a sense of quality. Having products in a glass display case always adds a touch of class to the product display. Most of these cabinets are locking as well, which adds additional security.

A typical 70” long retail display case will cost between $500 and $1000. In a small 500 square foot gift shop, you may only need two of these cabinets, and you can even use one as your POS counter, with products on display underneath. It kills two birds with one stone if you don’t mind me using the expression.

Standalone Displays

A standalone display in the middle of the store will allow for an entirely new dimension of product display versus only wall shelving. It is the way that you maximize the interior floor space for maximum leasing return on investment.

Standalone displays, whether on wheels or not, are considerably more expensive than shelving and can even be more expensive than a glass display cabinet. For example, a typical 2-sided display of painted steel will run between $750 and $1000 per display. A small store might require as many as 4, 6, or even 8 of this product display. 

Communications Equipment

Anyone who has a small retail store will tell you; you need a phone, internet, and maybe even a computer on the premises. Having a phone is necessary, so your customers can call your business. Phones don’t cost much money, but let’s say $50 to cover the cost of a primary phone.  

If you have tablets for the staff or a computer on-site so you can respond to client emails and website requests, you would likely need to purchase said equipment. A basic computer might cost as little as $300 or as much as $1,000 or more.   

Assuming you are going to have internet for your POS at the very least, you might also need to purchase a router. A basic router only costs between $100 to $300.  

If we take the cost of the phone, a computer, and a router, we are looking at a budget of about $1,500 to cover the cost of communication equipment.

Retail Location Renovations

We’ve discussed the initial fixture costs you are likely to face when starting your retail gift shop. As you have read, there are many things to consider. And the variables are far and wide as to how much it will all cost. It is even more true for renovations, so I’m not going to get into all the distinct possibilities for budgeting this in this article.

But, we’ll take a few key points that you will likely have to deal with when opening a retail location.

The majority of the time, retail, or rather commercial locations will require some degree of renovating to meet your requirements. And most of the time, the onus is on you to pay for these renovations. At least, that has been my experience with commercial properties.

Assuming you find a location for your gift shop, which only requires minor renovations, the following are likely renovations that will be required. Once your renovations are complete likely your local town will require that you obtain a Certificate of Occupancy before your grand opening. Check with your local town building department.


Many retail locations that you would lease would need a new floor installed. I’ve reviewed hundreds of sites, and only about 10% had finished floors that did not require renovation.

Luckily, a small gift shop of about 500 square feet isn’t going to cost an arm and a leg to redo the floor.


Painting your store is almost always going to be necessary. Many landlords will do this part of the renovations for you, but don’t count on it. And don’t count on it being a color that goes with your business color scheme. Again, you aren’t going to lose your shirt on this expense. A small store won’t cost much to have painted, even if you hire a pro to do it for you.


One of the most crucial aspects of providing a good ‘feel’ for the interior is the lighting. As discussed, you’ll likely want to have some display-specific lighting, but you will also need to address the overall light issue.  

Depending on the commercial space you’re considering, you may or may not need to get into this end of renovations.

Drop Ceiling

Most retail locations use a form of a drop ceiling. It is because most commercial buildings do not have ceilings at residential ceiling heights but often have extended height to accommodate warehouse racking and the like. If you lease a completely bare retail location, you may need to have a drop ceiling installed. 

Drop ceilings can be a bit pricey but offer you the opportunity to customize the space. It will also allow you to modify the lighting due to being recessed into the drop ceiling.


A crucial step in taking over a retail space is making sure you have new locks and keys. It will be your livelihood, and having a cheap lock or a lock that someone else other than the landlord might have a key to, is an essential step to address. It is where you don’t want to cheap out on the budget. Get an excellent locksmith to come in and replace the locks. Just don’t forget to confirm this step with your landlord first.

Now that you are aware of all the costs associated with opening your brick and mortar store you are ready to start planning your grand opening! Use some these low-cost and high impact event marketing ideas.

Top selling gift shop items

Many different assortments are necessary for a gift shop to be optimally profitable.

Women’s and men’s clothing, small items that may be useful in life or make excellent decorations for your home are all bestsellers in boutiques. Gizmos, toys, decorations, and other popular things that people like are all essential in every excellent gift shop.

  • Decorative mugs – with a printed design, nice message, or hand-painted decoration. .
  • Greeting cards – for holidays, birthdays, and romance
  • Coffee thermoses – unique, stylish, theme designs
  • Hair accessories – barrettes, headbands, and hair ties
  • Jewelry – necklaces, bracelets, earrings for women, men and children
  • Candles and scented home decor items
  • Scarves – fashion and cold weather
  • Gloves
  • Calendar and daily planners
  • Slippers and casual shoes
  • Hats and caps
  • Toys and games
  • Electronic accessories such as chargers, headphones, and cases
  • Books and puzzles
  • Art, plaques and home decor

Gift shop industry statistics

In 2020, sales in the United States for gift, novelty, and souvenir stores were around 13.6 billion dollars. The market is expected to grow at a compounded annual growth rate of 3.37% by 2025.

While Millennials and younger consumers prefer to travel and entertainment over other traditional presents, presents remain an important way to express gratitude or love for others. Gift cards are still popular Christmas presents in the United States.

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  1. Bamfield, Joshua, Shrinkage, shoplifting and the cost of retail crime in Europe: a cross‐sectional analysis of major retailers in 16 European countries., International Journal of Retail & Distribution Management, ISSN: 0959-0552,, Accessed June 4, 2020.
  2. Steele, Jason, Payment Method Statistics,,, Accessed June 4, 2020. 
  3. R. Angeles, RFID Technologies: Supply Chain Applications and Implementation Issues, Information Systems Management, vol. 22, no. 1, pp. 51-64, 2005. Accessed June 5, 2020.
  4. DISPLAYS2GO,, Accessed June 5, 2020.
  5. Allen Display,, Accessed June 5, 2020

FAQ: Retail Store Startup Costs

  • The retail industry standard of calculating annual sales is sales per square foot. Major chain retailers frequently generate $300 to $400 worth of annual sales for every square foot. (Thus a 3,000 square-foot store would generate $900,000 to $1.2 million in sales annually.)

    Smaller gift stores often earn fewer dollars per square foot. less than that. According to the industry professionals at Gift Association of Gift Retailers of America retail stores with fewer than 1,800 square feet have an average sales range of $115 to $140 per square foot annually.

  • Gift stores are very lucrative since merchandise markups on average range from 100 to 250 percent as opposed to 50% or less in other industries.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

Start Your Retail Gift Shop