The Hidden Hurdles: Challenges of Running a Grocery Franchise

Are you aware of the pressures of today’s fast-paced world? Today people expect convenience over anything. Consumers expect premium goods at affordable prices. 

Grocery franchise stores are therefore currently the best choice for a business venture in the entire world. 

Everyone wants quick and simple solutions to their everyday issues in this busy society, and what could be more convenient than a grocery franchise store? 

While running a grocery franchise where you get everything handy from training to brand recognition, there are a lot of challenges to running a grocery franchise.

The Competition to be Ahead of All in the Market

In this time the grocery franchise stores have gained a high level of competition. 

With chains throughout the country at national and local levels, all franchise holders want to establish their supremacy. 

Some might offer lower prices, and others might offer better services to attract customers attention. 

This makes the job of running a franchise of a grocery franchise store a little hard as it requires hard work.

Many grocery franchise stores are engaged in price wars. Now by this we mean that they will try to keep changing the price to engage more and more customers. 

For example, when demand for a product has increased, the franchises would keep lowering its price compared to the other ones to attract more customers. 

But at the same time a balance is maintained so neither the franchise undergoes a loss nor the higher prices push away the customers.

Even though big grocery franchises offer wide varieties of products and services to customers, sometimes people prefer to shop at local shops. 

This increases the competition for the grocery franchises as people prefer going to the shops in their vicinities or the shops their families have been going to for ages.

The most important factor these days as to the increase in the competition of grocery franchises is that many of them are offering online services to the customers. 

Now with this trend, building an online presence is a must to stay ahead in the market competition and become a dominant force.

Also read: Best Practices or Opening A Grocery Store Franchise

Problems with the Supply Chain

Now while running a grocery franchise, the most important task is to maintain a supply chain. 

Groceries are usually perishable goods, and if not handled and stored with care, they can be damaged and spoiled.

In the market there is always going to be a fluctuation in demand. 

At the times of festivals or any other occasion of holiday, the demand will probably be higher.

This can cause a little problem managing the inventory.

Now the big way through which franchises run is suppliers, and any problem, like the delay in delivery or rise in prices, may interrupt the smooth flow of store operations.

Consistency of Maintaining Good Quality

As discussed earlier, people do want convenience these days but not at the sake of quality. A good quality product and service is their foremost priority. 

And a good grocery franchise would provide the same to its customers, but if it fails to do so, then it might lead to dissatisfied customers.

From ensuring that the products are fresh to keeping a check on the safety regulations, it’s a duty of the grocery franchise to ensure all of it. 

Perishable goods are in danger of being damaged if not taken care of and thus require being managed and served fresh. 

While on the other hand, when offering customers the products and services, it must be ensured that all measures to ensure the food safety are taken care of. 

The grocery franchises must stay up-to-date with new food laws.

Change in Consumer Preferences

By change in consumer preferences, we mean that people tend to form new likings, which could be due to many factors like tastes, needs, etc. 

Now in the present times, people have had an inclination towards healthier choices. 

They tend to prefer healthy grocery items like organic, non-GMO, low-sugar, gluten-free, and plant-based products. 

Thus it is a tough task for the grocery franchises to keep up with the change in habits of consumers. 

People have started to have a liking for diet-favoring foods, and thus grocery store franchises must keep them in stock.

Seasonality and Demand Fluctuations

The pattern of demand for the product will not remain the same throughout the year. 

At some point, like during festivals or other holidays, the demand may rise, and during an economic recession, the demand may fall, leading to a fall in prices. 

Thus the pattern of demand keeps changing, and the grocery franchises are to keep up with this pattern.

Some products gain higher demand during summers, like watermelons, cold beverages, and other products like soup or hot items may gain the increase in demand during winters. 

Thus the stores are to keep the inventory stocked as per the weather demands.

During times when there is a recession in the market, there will be a constant demand for basic necessities, but the demand for luxuries may fall, and during the times when the economic times are stable, the demand for luxuries may also be high. 

So there is also a change during economic times for demand of certain products.

During festive seasons, the demand for items like sweets and other gifting things may be higher than at normal times.

So in general, the grocery franchise store must keep up with the patterns of change and stock the products as per the need of that particular time

Labour Management

Another major challenge is that when recruiting a workforce for the franchise, people who share the same vision as you must be recruited. 

But this becomes a little difficult to figure out. Now in this field, front desk jobs offer very low pay. 

Making it significantly less attractive for people to apply for and simultaneously other benefits like health insurance, etc., are not provided. 

With this comes a shortage of labour. Sometimes the jobs at a grocery store require much more physical strength to lift and move items, which makes it a relatively less likeable job option among higher-age and physically challenged people.

Employee turnover is also a significant issue in grocery stores, as workers tend to leave their jobs and it makes it difficult to look for replacements.

There could be many reasons for the same, like low wages being offered. 

When an employee is offered a better wage at some other workplace, he would definitely want to make a move to that job. 

Other reasons could be job insecurity, less engagement of employee-employer, making them feel less valued, work-life stress, etc.

When there comes an issue with labour management and employee turnover, significant problems like disruption in operation, increased waste of time in recruitment and training, and low productivity are faced by the franchise.

Thus the focus of the franchise must be forming an inclusive workspace for the employees and providing them with whatever benefits it can, like payday leaves, incentives, etc., 

so that they want to work rather than move to a new place.

Rising Operational Costs

One of the major challenges faced by grocery store franchises is that there is a rise in operational costs. 

The grocery stores require very large spaces to run, and thus the rental costs are also very high. 

In other situations, some grocery stores are formed on leases, and these can make it difficult for the franchise holders to change or adapt to the changing economic conditions.

Then there is a rise in minimum wages causing an increase in labour costs, and for recruiting special skilled workers like bakers or cooks, the costs may be much higher. 

Also, certain benefits like payday are to be provided.

Then there comes the management of goods costs, supply chain costs, technology and infrastructure, utilities costs, etc., which are to be managed by the franchise.

Franchise Compliance

As one establishes themselves as a franchise, it is very necessary for them to follow the rules set by the franchisor to ensure that the brand’s integrity is maintained throughout.

The franchise must work in a uniform manner, provide the best services and qualities, follow the contract and all the instructions that are binding, follow the terms and conditions, and also keep a quality check.

Following franchisors orders is necessary for a smooth operation of the store.

Suggestions to overcome challenges while running a grocery store franchise

A strategic approach can be used to overcome the challenges faced while running a grocery store franchise.

1. Localize Marketing Activities

As a franchise, you can look for ways to localize your marketing activities while also adhering to franchisor regulations. Put an on Emphasize neighbourhood events, support neighbourhood endeavours, participate in events, and host events.

2. Customer Loyalty Programs

To encourage recurring business, put in place a loyalty program. When you give customers who purchase frequently incentives like discounts, freebies, or special offers, you form a loyal customer base.

3. Personnel Flexibility

You can train the workers to perform a variety of jobs, such as stock clerk or cashier, etc., so this way you can make use of the staff in a more effective manner and use them as a response to peak or off-peak times. This lowers labour expenses while guaranteeing sufficient service during busy times.

4. Reduce Waste

As a grocery franchise, it must follow stricter waste management procedures, particularly for perishables. The best way could be providing a sale on items about to expire or a quick sale of them, etc.

5. Participate on Social Media

You can interact with your local community on social media even if the franchisor offers nationwide campaigns. By engaging on social media, you can engage with customers, know their reviews and opinions, run focused promotions, promote local staff, and draw attention to your store’s distinctive products and increase the overall sale.

6. Pay Attention to Service Quality 

Make sure your employees have received adequate training in customer service to provide the best quality services to your customers. Knowledgeable, amiable staff members who share the same vision as the franchise can build devoted clients who come back for the experience as much as the goods.

7. Grocery Store Design and Maintenance

One of the most important things to do when running a grocery store is to maintain a clean and customer-friendly store. Customers would like to come and spend time in your store if it is clean, well-maintained, and has well-managed product placement.

8. Online and Delivery Services

 Online ordering and delivery options are the best ways to increase your store’s sales and reputation. As people expect convenience, the ease of curb side pickup or home delivery is becoming more and more expected by customers, particularly for grocery retailers. If possible, develop an internal solution or collaborate with providers like Instacart.

9. Eco-friendly Store 

By running a store that is eco-friendly, you attract eco-friendly customers and also add to the environmental activities. Encourage customers to use paper bags, etc. Prefer not to use plastics for packaging.

Check out this: Tips and Tricks for Successful Online Grocery Shopping

Conclusion

Running a grocery store is a very enticing and exciting opportunity to start a venture, but at the same time it involves a lot of risk and challenges. 

As mentioned above, there are certain challenges that a franchise can face when running a grocery store, like labour management issues, inventory stocks, operational costs, demand fluctuations, etc., 

and to overcome these there are certain suggestions like online delivery services, grocery store maintenance, participating in social media engagement, etc. 

Also, the increase in competition in the market demands for the franchise to stand out in the competition by providing exceptional services, products, etc.

Also these days people have a bend towards eco-friendly items, and by encouraging less use of plastic and more use of reusable bags, you can add to the environment.

By doing such things, one can avoid the challenges and run a smooth grocery store and, in addition to this, make profits and have long-term success in this competitive market. 

So address the key issues and run a successful grocery store franchise!