Starting a supermarket business is a highly profitable venture. The supermarket is the high-tech descendant of the corner shop. It started off as a glorified grocery store and then turned into a multi-level marketing machine. Some of the largest supermarkets are able to provide the consumer with a complete shopping experience that gives them no room to visit any other alternatives.

To reach that level, you need a multinational and multi-regional outfit. There are still many opportunities for small and medium-sized firms to specialize in the supermarket business. The reasons are mainly to do with the fact that the larger chains have lost the personality that was once associated with shopping. They are in effect a conveyor belt of consumer goods. Some people prefer a much more intimate relationship with their grocery store and that is why supermarkets remain one of the most popular business ideas for the budding entrepreneur. Here are a few tips to get you going in the supermarket business.

Location of the Supermarket Business

It goes without saying that a poorly located supermarket is the death of the business. Private cars have made it fashionable for people to get out of town in order to do their shopping. However, that is not an option that is suitable for everyone since there are still consumers who hanker for the personal touch. It is best to position your supermarket business as if it were a local community center. That means building relationships with the public within that target market. It also means ensuring that your customer care never falls below their exacting standards.

If you get your location right, then there is no reason why you cannot enjoy the significant revenue streams that a supermarket business -is capable of bringing. People are now used to shopping at all hours. In particular, you should take note of the resilience of the basic household shopping basket which has remained dominant even during the worst phases of the recession.

Product selection criteria

The most important consideration when selecting a product to sell in a supermarket is the extent to which it meets the needs of your clients. Many small supermarket businesses fail because they do not bother to spend money on market research. Even if you think you know an area or market very well, it takes the cold objectivity of a researcher to be able to separate the fact from fiction. You will know what products are popular and why they are popular. It may turn out that you want to experiment with the less popular products. At the very least, market research will ensure that you make a calculated risk that is based on prior knowledge.

A populous area is not necessarily the key to success in the supermarket business. The larger establishments have already cornered the market on mass production. Instead your focus should be on providing unique high quality services to a small clientele until you are able to open up larger chains. Many supermarkets today are able to sell a range of household items, fresh food, canned foods and utensils. The choice is entirely up to you and your capabilities at a given time. Otherwise the market continues to expand.

Supermarket business


Watch the wastage and sabotage

It is impossible to operate a supermarket business single-handedly. You need a significant staff of tellers, cleaners, stackers, accountants, marketers and supervisors. That variety of personnel might mean that a lot of wastage occurs during the production or marketing process. There are far too many stories of supermarkets that would have been successful had it not been for a pilfering worker or infiltration. That means that you need a team of auditors who do not just consider what is involved in the marketing process or even the money but also the activities of workers. You will need to install an appropriate security system and update it on a regular basis. The security is not only for the merchandise that you are selling but also the workers that are in the store.

Licensing and permits for the Supermarket Business

There are different levels of licensing and paperwork that are required before you can run a supermarket business. Some of these relate to the type of business while others relate to the premise and employees. The government will also require strict records for personal, corporate and indirect taxes. Pay attention to the rules for VAT (Value Added Tax) because they could potentially lead to serious litigation. The processes become more complex if you intend to operate in more than one state since each will have its own rules and regulations. For example; there are states that demand licensing for each of the products that you are selling as well as the generic license for the supermarket. You may want to add a mini gas station for convenience. However, that also brings new safety and security implications for the establishment.


Make sure you have a comprehensive supermarket business plan

The failure to plan is the beginning of business failure. The supermarket business plan must be clear and succinct enough to give your potential partners, clients and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain the nuances of the business that you propose. At the very minimum you need to have the following included:

  1. The mission, vision and operational strategy
  2. Market Analysis And Customer Segmentation
  3. A business case showing that the business is financial viable and sustainable
  4. A marketing and customer care plan
  5. An organizational chart and human resource policy
  6. A three-year expansion outlook
  7. A risk and rewards Analysis

You will need to make an informed decision about the business type that you will adopt for your supermarket business. Each of the different business entities requires very specific application processes for permits and registrations. The business type you select will determine who owns, runs and supervises the operations of the company. It’s also better to have a website for your supermarket business.

Tentative budgets

The cost of opening up a supermarket business is not fixed. It all comes down to the size of the establishment and the stock that you are going to use. At the lower end; $20,000 may be sufficient to start the corner shop. However, if you want a really big supermarket with a gas station then you could be looking at an initial investment in the region of $1 million dollars. The good news is that this is the type of business that is more likely to attract interest from investors and lenders.

Growth and development

Supermarkets are rarely static. You will find new products and new clients. The key is not to take on any product or service that you are not fully prepared for. There are plenty of incentives to earn the loyalty of your customer. For example, store cards and bonus points will encourage consumers to come to your supermarket business. On the other end of the spectrum are the small shops in small towns where the use of cash is preferred to anything fancy like credit cards. Be sure to develop partnerships with particular brands who may want to sell their products on your shelves. The profit share schemes that they propose could significantly improve the supermarket’s bottom line.