How To Start Grocery Store Business in India

Do you want to start a grocery shop? Find here a comprehensive guide on how to open a grocery store business in India for your ready reference. 

Generally, the grocery store is a perfect business opportunity for the metro cities as well as small towns. And you don’t need to have any skill or experience to start and run this business. In addition, the business allows you to initiate in a size that fits your investment capacity. However, trustworthiness and reliability are the major essential aspects of this business.

The grocery shop is a popular retail business in India. Generally, this type of store sells fresh, dry, canned, and packaged commodities directly to the consumers. The inventory includes both the food and non-food items. However, all are essential household items.

Broadly you can start a grocery retail store in two ways. One is starting your own store and another is opening a franchise. Opening a franchise is comparatively easier than starting your own. However, your own business model will definitely ensure larger profit margins than the franchise.

8 Steps to Start Grocery Store Business in India

1. Market Study For Grocery Store

A grocery retail store is a heavily localized business. You can only target the neighboring consumers of 2 to 3 Kilometers surroundings. Therefore, you must study the local market first. Before starting the business, you must have extensive knowledge about your customers as well as your competitors.

Identify the needs and desires of your customer. Additionally, select or develop your product or service that will meet customer needs and preferences. Analyzing your customer will help you to assess the market size and the factors that influence their buying decision. All this information will help you to select the right location, determine the product, and fixing the right sales strategy.

2. Select Right Location

Selecting the right location for your grocery retail store is a make or break decision. Generally, population density is the most important factor in making the right choice. The location must have between 500 and 1,000 people living within a one-mile radius. Impulse purchases hold a lump some share of a grocery store sale. Try to establish your store in the residential area or nearby schools, parks, etc.

3. Startup Cost For Grocery Store

Generally, startup cost depends on the size of your store and inventory. Broadly, there are two types of costs involved in this business. One is fixed costs like procuring the store, the security deposit in case of rental space, computer, printer, weighing scale, and other infrastructure costs.

The working capital cost broadly includes inventories, staffing, and utilities. If you are starting with small capital investment, then you must start with rental space. Starting the business from a rental location eliminates the huge cost of purchasing the space.

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4. Grocery Store Registration & Licensing

The registration and licensing factors hugely depend on the location where you are starting the business. Sometimes, it varies from state to state also. Therefore, you must check the requirements for licensing and permissions for your specific store.

In India, you will need to have a Trade License from the local Municipal Authority. Additionally, you will need to apply for the license under Shops & Establishment Act. Also, you need to have a GST registration number.

5. Setup The Store

Store design plays an important role in the overall success of this business. However, it depends on the size of your business. It is advisable to consult with an interior expert and craft a floor plan. Try to offer a comfortable environment and convenient shopping experience to your consumers

Decide whether you will offer self-service or over the counter service. Therefore, designing the store layout is an absolute necessity. Try to place the products keeping in mind the convenience of the customers to see and reach them. Additionally, position products with the highest profit margins at eye-level.

Additionally, you will need to have a computer, bill printing machine, weighing scale, etc. It is advisable to use a Point of Sale software for rendering the good service and getting the control of inventory.

6. Sourcing Inventory For Grocery Store

Selecting the inventory of a grocery store depends largely on the target market and the location of the store. It is advisable to establish a strong business relationship with your vendors. If you plan to keep fresh foods, then have to be careful about the perishable nature of the items.

Additionally, make sure that you do not keep packed inventory for more than 20- 25 days. In the time of procuring the processed foods and pharmaceutical items, check the expiry period.

7. Staffing

Staffing plays an important role in this business. An employee of a grocery store should both be alert and trustworthy. The employees should be able to handle the crowd and cater to the customers with a smile even in the rush hours. Additionally, they must have a thorough knowledge of the inventory.

It is advisable to hire people from the local community and provide primarily consumer-centric training and some functional training as well.

8. Grocery Store Promotion

Branding and advertising are a must in this business. However, you must advertise locally. Additionally, try to provide the best customer service to your consumers. Always keep in mind that a satisfied customer is the best advertiser.

Word-of-mouth campaign is the best way to get a good and consistent customer base. Additionally, you can consider giving advertisements in the local newspapers and TV channels for promoting your grocery store business.