Hello! Are you looking for a supermarket business plan? Planning on how to start a supermarket business in India? We are here to offer you a complete guide to the supermarket business.
The retail Sector is one of the fastest-growing sectors in India. According to the IBEF retail industry report the retail sector of India is expected to reach 2 trillion dollars. Starting a supermarket business is a great idea to generate profits from one of the fastest-growing sectors in India. The retail sector contributes a huge part to the country’s GDP.
Even though the country has seen tremendous growth in e-commerce, customers still prefer to visit a supermarket to buy groceries for their homes every month.
Unlike other countries where one or multiple supermarket chains dominate the market, India’s population is still mostly dependent on small supermarkets and Kirana stores due to the convenience of the location and easy accessibility.
Today, there are major supermarket market chains in India like Dmart and Reliance retail in India. But they are mostly available in major cities and still most customers prefer local supermarkets for their everyday groceries.
Here is a Detailed Super Market Business Plan and How to Start a Supermarket in India Successfully
1. Start with a proper Business plan for your supermarket
A business plan is very important for starting any business. Without a proper business plan, most businesses can fail. Properly plan the following requirements to set up a successful supermarket business.
Market research
Do a thorough market research before starting a supermarket business. Check out the current trends in the retail sector and plan how to use the current trends to improve the supermarket’s growth. Start by analysing how the supermarkets in your area perform and what products are sold mostly by these supermarkets. Having a proper market strategy report can give a proper outline for the supermarket business plan.
Investment required for a Supermarket Business
Starting a supermarket requires a substantial investment. In India to start a supermarket business you need to invest a minimum of 10 lakhs to more than 1 crore rupees based on the size of the shop that you are planning.
If you are planning to start a limited grocery Kirana shop you can start it with a 2lakhs investment. But, to start a large-scale supermarket business and set up staff and market a business the investment needs to be large.
Brand Partnership Plan
While making a supermarket business plan it is important to list the important brands that you will make partnerships with. You can visit local wholesale manufacturing brands and consult with them about the supermarket business.
Having a partnership with local wholesale suppliers can help you give basic groceries for a cheap price to attract more customers in the long term. An example of this is you can partner with a local pickle manufacturer to offer the product at the very best rate than your competitors. This can help generate more revenue for you and your wholesale partner.
2. Legal Requirements to Setup a Supermarket Business in India
Choosing a Name for the Supermarket
Choosing a name for a supermarket is very important. A proper and attractive name can help your business in the long run. You can register your name and even get a trademark registered for it.
“Dmart” for example is a successful brand with chains of supermarkets in India. Having a name like this can be easily understood by your customers. Make sure your business name suits your service.
It is important to find out whether the name you choose is available legally and whether no one has already registered it before.
We suggest you buy a domain name as soon as you fix your name so that your brand can have the same name online for its website.
Supermarket Business Registration
You may register your Supermarket as a sole proprietorship or limited liability partnership or a private limited company based on your desire. If you are planning to run the shop by your self you may choose a sole proprietor or a one-person company (OPC) which offers limited liability.
If you plan to start a supermarket with your business partner you can choose partnership registration. If you want to start a brand and are planning to provide franchises then you can choose private limited registration.
GST registration
GST registration is compulsory for starting a supermarket business. Currently, the government of India has set certain limits. Businesses with 20 lakhs turnover annually must have GST registration. Paying tax properly will help the business in the long run and your business will be legally compliance with the tax system of India.
Having a GST registration can help supermarket businesses offline and in e-commerce. Failing to acquire GST can lead to severe penalties and legal complications.
MSME Registration for Supermarket Business
MSME [micro, small and medium enterprise] Registration is available for a supermarket business in India. It offers a wide range of benefits to avail certain government schemes and subsidies for your business. Your business must be a registered entity to apply for MSME.
Obtaining a State Government Trade License
Most state governments provide trade licenses for businesses. You must obtain a trade license in your respective state before opening your supermarket.
FSSAI License for Supermarket Business
Food Safety and Standards Authority of India [FSSAI] License is compulsory for businesses that operate in the food and beverage industry. Your supermarket should have an FSSAI license to operate without any legal trouble.
Having this license also helps your customers to trust your brand as you are in compliance with FSSAI standards.
3. Setting Up Your Store
The next step after a proper supermarket business plan is to prepare for setting up your store. There are lots of factors to start a supermarket business in India. Let’s see them below.
Choosing the Right Location for the Supermarket
The location of your supermarket is very important for its success. The number of customers visiting the supermarket will mainly depend on its location. Plan to open a supermarket in a residential area.
Having a supermarket in a residential area can help bring more customers on a daily basis because these customers require groceries very often and they will visit a supermarket that is located nearby them for the most needs.
Make sure your supermarket location has a proper parking space. Most customers prefer parking their vehicles safely. If you set up a proper parking space it can be a great step towards your customer satisfaction.
Selecting the right products to offer
Not all products can be sold so it is important to choose the right product to sell. The purchasing trend can vary based on festivals, holidays and market conditions.
First, find out what the local people in the area need where your supermarket is located. Most of your customers will be people from the local area so choose the products these people purchase regularly. You can experiment with new products one by one to find out the right one which sell faster in your supermarket.
Make sure you offer a wide range of products as this can help customers have multiple options.
Finding Reliable and Quality Suppliers
As a supermarket business owner, you must find and partner with reliable wholesale suppliers who can give you the best discounts and best quality supplies. The quality of the product is very important for the success of your supermarket.
Some supermarkets provide cheap quality goods for the profits. Don’t do this as this can affect your business in the long run.
Buying Necessary Products
You will need shopping carts both big and small size depending on the size of your store. You will need systems with supermarket billing software. If you sell a product that requires low temperature then you must buy a refrigeration.
Training the staff
Staffs are an important part of a supermarket business plan. You must train your staff on billing and customer approach. Insist your staff to help customers who are looking for products. This can help customers to develop a good opinion of your supermarket.
Regularly conduct meetings with staff and train them to update based on the current needs of customers. Make sure your staff provide the best customer service experience.
4. Store Layout and Maintenance
Store layout is a big topic in itself. Top supermarket giants in India like Dmart and Reliance Retail have dedicated teams to set up the layout of their stores.
Make sure you strategically place the products that need to be sold fast. The position and placement of the products in your supermarket determines how fast the product will sell.
Product placement is an important strategy that a supermarket business owner must learn and implement.
Make sure the supermarket is kept presentable and clean. Clean the floors properly and arrange the cardboard boxes neatly.
5. Partnering with E-commerce brands
Currently, there are brands like Swiggy, Zepto, Flipkart and Dunzo that offer online grocery delivery services. As a supermarket owner, you can tie up with brands like these to deliver products to customers who order online.
6. Marketing Your Supermarket Business
Create a Google business profile
Having a Google business profile is very important these days. This can help users to find your supermarket business from online searches and read reviews about your store.
Google business profile offers a wide range of options to set up your supermarket photos, map locations and options to add the latest photos of your shop and the products that you offer.
Get a website
Having a website can help your business to be open online 24*7 and for 365 days. Choosing the right web designer is important for setting up your website with better design and user experience.
Web design company can help your business to grow online by providing a branded website that suits your business overall.
Branding for your Tea shop
Branding is important for any business. Branding your supermarket can help your customers identify your store. Branding also plays a very important role when you set up a franchise business model.
Marketing a Super Market Business
You may use traditional marketing strategies like digital signage, posters or flyers or you can use online digital marketing strategies like SEO, and social media marketing to boost your brand.
7. Profits of Supermarket Business in India
Profit margins in the supermarket business can vary, but industry averages suggest that supermarkets typically aim for net profit margins ranging from 2% to 6%. This means that for every ₹100 in revenue, the supermarket may retain ₹2 to ₹6 in profit after accounting for expenses such as rent, utilities, staff wages, inventory costs, and marketing expenses.
A small supermarket or a Kirana store in India can earn anywhere from 50,000 Rupees to 1 lakhs per month. A medium-sized supermarket with an investment of 10 lakhs and above can earn 1-5 lakhs a month. A large-scale supermarket can earn lakhs or crores based on their investment.
The profit varies based on the location of the supermarket and the products offered. A supermarket in a small town may earn less compared to a supermarket in a city.
Hope you found this information about supermarket business plans and how to start a supermarket business in India useful. Starting a business is a great idea to develop your life having confidence and proper planning can help you succeed in the supermarket business.