How To Start Your Grocery Store? – A Guide

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Wondering and planning to start your grocery store? Well, here’s a detailed guide for you to know how to go about it and what to expect from the business.

No matter how far humanity moves forward, some things will always remain (mostly) the same. And one of these things is the humble grocery store. In recent years they may have started to accept online payments or partnered with an online delivery app, but they have more or less remained the same.

For people who are just starting in business, grocery stores are one of the most lucrative business ideas in India for 2022. It can even be a great source of side income. This article discusses all the steps that prospective grocery store owners need to take to get started and avoid all possible pitfalls. Let’s get started.

HOW TO START YOUR GROCERY STORE?

Step 1: Zero in on a Business Model

A solid business plan with an in-depth market assessment is necessary for a grocery store to succeed. Understand that it will be challenging to create a USP for a grocery store in terms of products.

What owners can do is generate uniqueness in terms of services and other intangible aspects. Store space is a huge factor, and it entirely depends on budget constraints. Buying real estate may not be feasible for a lot of people – they can rent it instead.

Expected ROI (Return on Investment) should also be considered. The larger the scale of operation, the longer it will likely take to break even and start making profits.

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Step 2: Decide Where to Locate the Store 

Choosing the right location is important because once it is chosen, it becomes very difficult to change it once it is chosen. Almost everyone will agree that stores should be easily accessible to the local population.

Strategically locating a store close to a larger store that is doing exceptionally well is also a great idea. Also, try to find out places from where the local population has to travel far to the nearest grocery store. Setting up a store in such an area almost guarantees footfall.

Step 3: Finalize The Store Layout  

The layout of the store directly impacts sales – especially for large stores. An important measure of profitability, profit per square feet, depends on this.

A well-planned store layout can also prevent Prevention of losses due to pilferage and lack of proper storing space can also be avoided with a well-planned store layout. Remember this – the store layout is a long-term strategic decision that cannot be reverted frequently.

So It’s worthwhile to hire a professional store design consultant who can design a layout that is aligned with your business plan and objectives.

Step 4: Branding

As mentioned earlier in this article, the only way for a grocery store to stand out is to differentiate itself in terms of quality of services and other intangible aspects. Branding can help do this.

The objective is to provide consistent quality and memorable experiences so that customers keep coming back to the store.

The unique experience must reflect in everything inside as well as outside the store, i.e., including the interior design, packaging, music played at the store, staff uniforms, etc. 

Also Read: Top Small Village Business ideas in India

Step 5: Employees

Here is a simple rule – The better the relationship employees have with a business, the better will be the relationship customers have with the business.

For grocery stores, hiring the right employees is important because they will interact be the ones interacting with customers. They should be motivated and content with their duties and responsibilities.

Maintaining a superior workforce requires more than just hiring the right people. It should be supported by defining the job design, job analysis, workforce planning, deciding roles & responsibilities, structuring salary, etc. 

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Step 6: Merchandising and Purchase

Merchandise planning entails the product categories that will be offered in the grocery store. This is mainly largely dependent on demand and supply.

Always stick to products and brands that are always in demand. Though margins may be low for popular products, there will always be a steady supply.

For homogenous products with several competing brands and SKUs, customer demand needs to be taken into consideration. Align purchasing decisions with merchandising plans and priorities to avoid delays or even running out of stock.

Merchandising and Purchase

Step 7: Standard Operating Procedure

Everybody working at the store (including the owner) should be crystal clear about their duties and responsibilities. This level of clarity can be achieved using something known as an SOP (Standard Operating Procedure).

It is nothing but an operational roadmap for each operation or activity – it defines a step-by-step approach to doing a task. SOPs should be well planned and documented.

SOPs also make it easy for owners to supervise, improvise better and remove any doubts concerning operations. 

Step 8: Management Tools

Even for a small-scale operation like a grocery store, using management tools rather than relying on physical record books can save a lot of money and effort in the long run.

This is because SKUs keep changing each time a product gets sold, gets damaged, or when they are restocked. This also has a domino effect on all the other functions, including financial records.

This doesn’t mean stores owners have to invest in expensive software. Well-crafted excel templates will do just fine. If time is scarce, just download templates (for a variety of use cases) from Lio

Step 9: Marketing Plan 

For a grocery store, the question that will be at the center of all marketing efforts will be “What value are we providing?”. Modern shoppers want more than just to buy stuff at a grocery store.

They want the complete shopping experience right from the advertisements to the parking space to be enjoyable.

Marketing should be spread out across multiple channels, including the traditional ones and digital channels. Being active on social media is the best way to keep people updated about what’s interesting at the store. 

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Step 10: Get Ready to Launch 

The day the store finally opens for the public should be more than just cutting a ribbon surrounded by friends and family. There should be considerable planning and marketing efforts leading up to the day of the launch.

Creating a buzz at a locality level works best, and be sure to get this rolling at least a month before the big day. Offering special inaugural offers and free drinks is standard procedure on the launch day. Keep that in mind. 

Also Read: 10 Best Business Ideas For Indians in Chennai

Frequently asked questions

Is GST registration mandatory for a grocery store?

If the annual turnover of your grocery store is more than 20 lakhs then it’s compulsory to get the 15-digit GSTIN number.

How to make grocery store attractive to consumers?

Always ensure that you have enough stock of commodities. Other than this, you can provide additional promotions, discounts, valet parking, membership points and free home deliveries to gain customer loyalty in the long run. 

Is the FSSAI license Important before opening a grocery store?

Yes, it is important to get a FSSAI license before opening a  grocery store.

Is opening a grocery store profitable in India?

Yes, Food Industry and Consumption is one of the best and most popular businesses in India. With right investment and marketing, grocery stores can be a profitable business.

How to choose the name of the domain for the online Kirana store?

The name should be unique, relevant, short, and easy to spell. Sites like godaddy.com, name.com, etc. can help you find nice names for your domain.

Conclusion

No matter how small the operation is, a grocery store is still a business, and businesses have to follow certain processes to succeed from the get-go.

In my opinion, all aspiring grocery store owners should follow these steps to make sure there are no cracks in their plan to open up their stores.

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About the author

Surabhi Guleria

8 comments

    • Hello Nischal,

      The SOP development process is an excellent way for managers and their teams to collaborate in documenting processes for the benefit of all.

      Proper systematic steps should be taken, such as developing a list of processes that you believe require SOP creation, planning the process for developing and managing SOPs, gathering information for your SOP’s content, writing, reviewing, and publishing your SOP, and maintaining your SOP over time. Please conduct your research and proceed appropriately.

    • Hello Rohini,

      Properly pricing your products is one of the keys to business success.

      There are numerous different pricing systems used in business. There isn’t one tried-and-true formula-based strategy that works for all products, businesses, or markets, though. It is customary to take into account a number of important elements when determining how much to charge for your product, such as identifying your target market, keeping tabs on what your rivals are charging, and comprehending the correlation between quality and pricing.

  • I really appreciate how thoroughly you described things and made it clear. Thank you for providing this information.

  • Can you provide me with some advice on how to improve customer satisfaction? I run my own grocery shop, and your article has enabled me to correct a few flaws.

    • Hello Anu,

      Creating a customer-centric culture, always leading with empathy, asking for feedback, acting on customer feedback, responding quickly, and making it easy for customers to contact your business are some of the tips that can ensure and improve customer satisfaction.

By Surabhi Guleria