Starting a supermarket business in India can be a profitable and rewarding endeavor. With a population of over 1.4 billion and a growing middle class, India offers a vast market for retail businesses. The supermarket industry in India is projected to grow at a CAGR of 11% during 2021-2026 as consumers are looking for one-stop-shop solutions for their grocery needs.
However, starting a supermarket business also comes with its own set of challenges, such as navigating the complex regulations and dealing with intense competition. In this blog, we will provide an in-depth guide on how to start a supermarket business in India. We will cover everything from the initial planning and preparation stages, to the day-to-day operations of running a successful supermarket.
Whether you’re a seasoned entrepreneur or a first-time business owner, we will provide you with the knowledge and resources you need to navigate the supermarket industry in India. So, if you’re ready to join the retail market, read on and discover the opportunities and challenges of starting a supermarket business.
Super Success of Supermarket and its Future:
As mentioned earlier, supermarket has seen immense growth in last two decades and is still expanding like never before. Earlier these markets were limited to metropolitan cities but they are now expanding to cities, state capitals and also to proper towns.
In summary, supermarkets and hypermarkets will play an increasingly important role in the Indian retail landscape. The growth of the middle class and increased urbanization will lead to increased demand for these stores. In addition, supermarkets and hypermarkets offer potential for increased profits for retailers, as they are able to optimize their operations and offer discounts and deals to customers. Therefore, it is likely that these stores will continue to remain popular and will continue to be a key part of the Indian retailing industry in the years to come.
Supermarket Business Plan and Establishment:
If you have made up your mind to invest in supermarket business then you are welcome to proceed. The first thing that matters in starting any business is the prior planning. Business planning require adequate research on the market which will give you a perspective into the business and will also give ideas for your business. Starting a supermarket business should concern the interest of the customers. Here are few important factors that will guide your business plan.
- The first important thing is the place of your business. If you are establishing your business in a metropolitan city like Delhi or Mumbai, a city like Pune, Indore, a state capital like Lucknow, Gandhinagar, or a town like Jaisalmer, your supermarket business structure will vary from place to place.
- Each of these places have different set of customers, big cities have rich customers who can afford branded top quality expensive products while small cities and towns make like imitation of those branded products at cheaper price.
- Market size will also matter and range of products will also matter. People of small cities and town have limited exposure and thus their demand often get limited to a range of products mostly the brands and items they hear from others and through ads.
- Price is the biggest concern because customers of different places have different budget for shopping. A person earning 50K INR can afford a limited amount of products per month.
After deciding the above concerns you will have to establish your supermarket whose first step would be an infrastructure. The size of your supermarket infra will definitely depend upon the customer base you are going to attract and the variety of products you would offer for sale. You will also be required to select a location in sync with the local laws and convenience of both customers and yourself.
Feasibility Analysis and Data Mining:
The above two methods will give you deep insight while you are going to proceed with your business establishment. Data mining is one of the most popular methods of analyzing data in order to get better understand of market. This research will help you in following ways.
- Understanding the market you are going to invest in
- Knowing about your competitors and how you can excel against them
- Shopping patterns adopted by your customers as they shop, what products are their priority, most sold product, brands that are in sale, latest trends, etc.
- Maximum, average and minimum expenditure customers do while on shopping on monthly basis
Keeping all these things in mind your supermarket business design will be carved. You may collect data by getting reports and figures of monthly supply of products to the place of your business, what products are mostly consumed, price range, brand, etc.
Registering your Supermarket:
Registering your business is the formal step you take towards making your business a reality. There are obvious steps required to be taken in order to formalize your business.
The first step is obtaining a trade license from the authority. You will be required to furnish some documents including your PAN card.
The second step is getting your business registered under Shops and Establishment Act of 1953 that lays down certain rule which should be followed by every shop owner. One is getting a food license for selling goods which requires permission from FSSAI. You can now even obtain such permissions online by fulfilling the criteria mentioned.
FSSAI is a body that governs the food quality of the products sold in the market. Nearly every packaged good comes with a certificate and number from FSSAI that guarantees quality in product. Permit needs to be taken based on your turnover. You can apply online as well.
Taxation is one such important aspect of every registered business. You can visit the GST portal online and register yourself as a proprietor or of any other business structure you plan to start your business as.
If you are starting at a local level then a proprietorship and partnership firm is mostly common. Furnishing the required documents you can register your business under GST. It takes a week or two to formally get your GSTIN. Some of the basic documents you will need are:
- PAN Card
- Aadhar Card
- Electricity bill to recognize your business space
- Bank Statement with valid bank account
- Previous tax records or TIN under VAT
- Certificate of Establishment
Other steps like a business space for lease for your supermarket, business structure are also necessary. Most lease contracts are governed by the Indian Contract Act, Transfer of Property Act and local rent control laws like the Delhi Rent Control Act.
Investment Required in Starting a Supermarket:
Investment for your business is one of the most important part of your business. Without investment there can’t be any business. A supermarket business is cost consuming business that requires a decent land space, a parking space, a well-structured infrastructure, stocks that you will sell, manpower to manage your business, servicing, rents and other expenditures.
Your business plan would probably have a detailed analysis of the capital investment you would require which will carry all the expenditure of everything you need for your supermarket business. The location of your business plays a key role in deciding the amount required for investment. Obviously you have to choose the location wisely making a fine balance between the crucial location and your expenditure amount.
Since it may not be possible to have that much of capital with you as bank balance it would be necessary for you to arrange money from elsewhere. The first choice should always be a loan from the bank. The second choice is partnership with other stakeholders but that may decrease your freedom and say in the business. The choice is always yours. If you are opening a supermarket franchise of some big brand, they will help you in securing loan easily because of their market credit.
Finding Vendors for Stock:
Vendors are the one who will supply you goods for your stock which you will sell in your supermarket. It is quite important to choose the correct vendor for your business as it will impact your sale and profit. As your business will grow there would be circumstances where you may need urgent delivery of goods and in some cases you may have to return those stocks which remained unsold.
For this there should be some flexibility between you and your partner. The second important aspect is the price at which you receive those products. Since you will be giving various discounts to your customers it is obvious that you will expect goods at cheaper price from your vendor.
Thus choosing a correct vendor is necessary for both quality and price of goods. Lastly, delivery is also an important aspect. When you are ordering goods from far region like from one state to another, prompt delivery is necessary as delay in delivery will cause loss to your business.
Typical Supermarket Merchandise:
It would not be advisable or sane in selling items based on generalization. Just because you saw certain items selling in a store in Delhi and you find it attractive doesn’t means that you will also need to have those products in your shop which is based in a small town. The choice of such merchandize depends on some of the following reasons.
- Demand in market
- Affordability of customers to purchase those items
- Level of demand whether high, low or medium
- Accessibility of those products in the region
- Overall, by selling those products you will gain profit?
Such questions are must to answer when you are filling your supermarket with different products because if these products do not get much customers then it will be your loss. Some of the common merchandise every supermarket has are:
- Common eatable items available for general use
- Snacks, soft beverage that are in trend
- Vanity products like beauty cream, moisturizer, comb, etc.
- Items used in bathroom like soap, shampoo, face wash, detergent powders, etc.
- Tea, coffee, sauce, etc.
- Cleaning items require for domestic cleaning in kitchen, rooms, bathroom
- Meat products both packaged and non-packaged
- Baby care products which includes nearly everything a baby needs
- Dressing items including latest fashion wear for men, women and children’
- House ware, cooking utensils, decorative items, etc.
- Electronic items for domestic purpose like iron, microwave, TV Fridge, etc.
- Furniture products
- Cosmetics, hygiene products, grooming item, etc.
Apart from these one can have special selected items which can be based on requirement.
Store Design and Fixture:
Based on the capital investment you can make it is obvious that the size of your store will be carved out based on the returns you will be making. So if you have a small space for your supermarket then how will you be managing various merchandize in your store and also make it representable. The only answer to this question is perfect and innovative store design and fixture.
Hire a professional who can provide you with latest and most innovative designs for your store that makes it easier for you to store numerous items in your store without making it look too much packed.
Also, those designs should also be flexible in order to accommodate different types of products with changing market needs and seasons. Wooden fixtures are not flexible and are subject to damage in a short time and they also do no look attractive.
As the world is moving more towards online marketing E-commerce is becoming more and more promising and reliable, with businesses like online grocery stores. With amazing potential and business worth investing online grocery store is gonna make you your BOSS.
Why to invest in Online Grocery Store business?
With stats of 3% to 12% of profit, the market is growing exceptionally well and there’s not going to be a better time to START.
With the market still growing, the competition is still in the numbers that can be dealt with. Even companies like Amazon Fresh look for vendors for supplies with an apt amount of commission that both are satisfied with.
Such Online business is a way for young and potential businessman to invest in, as the risk factors of loss is low when on small scale i.e. in initial stages and it slowly and steadily can give you your money back with a profit. This only works when you are ready to invest the money and time to make a profit.
Online business also provides an edge that in initial stages of your business does not require an office or big furniture but what it requires is only the product, mean for customers to access them and a transport to deliver them.
Developing a connection with local vendors with only benefit your growth, “Nothing’s better than an old man’s stories”, gaining there experience is worth for a growing businessman this connection can help you to understand what is better for your business? Which area buyers are potential ones? And how can you buy goods at a very low rate and sell at a reasonable rate?
Understanding their strategies and developing them to be your own is what going to make you a potential dealer, also having a good name of you in their ears is going to be beneficial for your future
Selection of the Area
“A businessman is who, who seeks profits”, and understanding your investment and coping with the demand of your customers can yield you good profit if you seek for a good area.
For this, you must know where are your potential buyers those who have large demand and are your often customers, being trustworthy of them is you must do, and developing confidence for you in them you should do. This can be done when your area of selection is good where you prioritize the most and the area which is closer to your center and also easily accessible to you and for your delivery services, which not only help your business to grow but also develop your marketing strategy.
Filling the Inventory
Here comes the most exciting part The Products your inventory is what customers are coming for, the goods that you sell are what makes your potential for the future and develop the trust of the customer in you.
How you should fill your inventory is something really important
- You should be more focused on Brand names because with these names comes trust and people prefer these names as a culture of quality and few see them apart to full fill their materialism.
- With brand names you should not forget what your customer is looking for, sometimes the brand is too costly for the budget of a middle-class family they want something good and less costly something local, this what you should remember that number of such families is far greater than those who only look for the brand.
- Also where sometimes even good businessman lags are their varieties of goods in their store, well you never know what can impress your customer maybe he was looking something that after looking in the heavens and hell he found that out in your inventory, well that’s is going to be impressive on your part.
- Negligence of goods is also not part of a good business strategy, you fill in the goods for your inventory regularly.
Your site or app or maybe your store on the partner site should easily reachable,” one does not like to roam in woods to gaze simple a tree”, if your store is not that easily reachable your customer is surely gonna leave you one day. To not let that happen your store should be easy to reach. You must be easy to access and orders can be placed easily.
Advertisement the Key for Success:
Ads are must in order to draw maximum customers to your store. You can advertise using the traditional and digital methods targeting your potential customers. You can give ads in print media, local media, digital media, and online media and in the form of hoardings and billboards to attract new customers.
Secondly, such businesses also grow mostly by word of mouth. A customer who returns satisfied from your store goes into his circle and showers praises. This happens mostly in small towns where the social circle is small and limited. Such confidence and trust is what makes your business successful and it is much more attractive than the paid ads you publish.
Also, do not exaggerate about your products in order to attract maximum customers. Tell them the reality and not some fiction which makes reality completely different from what you have claimed in your ads. This may attracts customers initially but breaks your business within a small time.
Get Billing and Inventory Software:
Since you are using modern day supermarket business module this means that everything you will have in your store should be based on modern parameters. You can’t use a paper based billing method while billing your customers not that it is outdated but it is also time consuming and laborious.
Presently, most of the businesses are using digital billing methods using computer based bill generation. For this you require an effective software for billing purpose. This software should also have the database of your products you sell and their selling record which will help you in later time for data mining.
Also, have a feedback response system that records feedback of your customers. Make sure your software works error free and is also fast.
Hire Service and Staff:
Though the basic model of supermarket is based on the idea that customers will walk into your store, select items they want to purchase and get it billed on the counter. But even for that you require efficient and prompt service in order to ensure client satisfaction.
There may be trouble for customers to find the items they are in search, those items may not have price tags, and those items may not be of standard use. For all these purposes you require a prompt staff service standing on toes for customer service. The billing service is of much more importance.
Ensure that customers coming on the billing counter are set free within few minutes. Have different counters to ensure that at the time of traffic there is no delay. Also hire learned and efficient staffs for billing purpose to ensure that they do quick billing within short time and that too without error.
Add Home Delivery Option:
People these days have become lazy or they do not have time to visit stores for shopping. You can always provide home delivery service for certain items. This may require transport vehicle like a bike or car for transporting such goods. Based on your profit and loss you can decide whether the delivery should be free or with cost.
In the end, what really matters that your supermarket should not only be rich with infra and products but is also very prompt in rendering service. People like to visit stores that make them feel important and entertain their smallest request with patience and generosity. Above all, whatever steps you take always look with the eyes of a businessman whether such step will lead you to profit or loss.
Present Yourself: “ For you to have a go, They must know”
For your business to be seen you should present yourself to them, this advertisement can be done in the following ways :
- Through pamphlets and brochures in the newspaper where people can easily read about you.
- Social media platforms where your store reaches a large audience and even a large number of investors can gain.
- Giveaways now days is becoming a trend to advertise your name this also can be done
- Partnering with recharge platforms that can give you the platform to deliver your name in terms of coupons of your store
There can be more different ways that can develop your name in the market if you want. Try everything possible that you want.
Tips for your Supermarket Future
If you believe in yourself, you are going to have a blast, but there are going to be times in your life when everything does not seems right, following what you try:
It doesn’t matter where you are but what can be done is what you should be focusing on. If you re satisfied with achievement or how far you have come then that is more than enough for your self-motivation sphere. You should believe in yourself and your and vision. You alone are generating income for so many of your employees who might have been unemployed without your support. Whenever felling low ask yourself “Why I started?” and tell yourself Why?
You should bring the obstacle to its knees. Have confidence in yourself and there’s no stopping you. They say “Businessmen who do not know how to handle failure die young”, therefore at the end of the it’s up to you whether to be a prey of nervous breakdown or boy the rides on challenges.
Keep Track of Market
Your business not only deal with customers but also with highs and lows of the market, you never know when the activity of the market can ride the mountain or when it hides in the deepest trenches. You should be a learner of the market but should be its husband to seek what it wants. You can invest your money to seek some money for the growth of the company.
Patience and Risks
Your business may not start rock and roll on the moment of your go, patience should be your companion. Sometimes even with a fully-fledged systematic plan for the business to grow, it can take up to 3 years, or even without any plan you go high. This means only in your you can have is patience.
Also, another factor that your business wants from you is that you should be ready for risks. Risks are required and essential needs of your business to grow, have faith in aspects that you believe and your guts and wits. Even tell yourself anything can happen and be ready for the worst-case scenario.
Look for Resources: “ if there’s a will, there’s a way”
There are several resources available for your guidance(like this one.) you can seek there help
Even many consultancy services in the market help you to have a systematic plan for your business at a very reasonable rate sometimes even up to 5 years, but in my experience, they are not worth the money that they want from us.
Consult any of your friend or relative that is in online business or somewhere around to it. Their personal experience is worth than anything that you might after a few years.
Well, another thing that one can do is read books of some great investors or businessmen who started from scratch to advance and made history worth to remember. For example people like Warren Buffet who is at the pinnacle of those 1% people in the world starting from investment in hedge funds to be the world’s richest man he has seen it all, their many entrepreneurs that can fix your ways time to time. Just looking for the way is what you have to do.
The path to be successful in your business is what that requires patience, determination, and discipline. This path can not be cleared without any of the ones written. Staying focus paves your way to the shores of success and to the island of your dreams.
Never deviate yourself from the motive always remember what you wanted to achieve in your life and what can be done to wither away all hindrances in your life. In initial stages of your business when you are in small scale league sticking to the plan is what is required on the macro level in the micro-level you can change here and there few aspects but main motive should be the same as it was in the initial stages of the idea, as this develops a base for the future one seek for.
Focus like Arjuna and you’ll be an immortal.
In the end, you should start the business with it’s developed frame wok and With the enthusiasm and systematic plan to achieve the BEST of all the world that you want.