How to Open a Grocery Store Franchise
Starting a grocery store franchise in India can be really profitable as the industry seems to grow at a high rate and the never-ending demand of grocery and wide range of products never disappoint the owner.
As the retail industry in India continues to grow, supermarket franchise can play a significant role for the new entrepreneurs who want to do business.
However opening a supermarket market is not easy, you need to consider several factors in mind and go through a lot of planning, and specific procedures and you need to have full understanding of the market in order to succeed and make a profitable business out of it.
Here are the key factors to do when opening a grocery store franchise in India.
Also read: Top 10 Grocery Store Franchise Cost in India: A Comprehensive Guide
1. Research Analytics
Before directly entering the grocery store franchise market, you should know about the entire market and conduct research about every product , its demand and supply.
This will make sure that your investment aligns with consumer needs and market trends.
Having a look at the previous data can help you grow at a faster pace than normally.
Key Factors in Research Analytics
A. Customer Needs – Communicate with the consumers , neighbours and ask them what products they like and they use, always know what your customers need and have that products in your supermarket. The product range, pricing and the convenience must suit the customers at every point.
B. Competition – You must know about all the supermarkets or normal shops nearby and check what is the gap that you can fill. There is always a way to be ahead of your competitors you just need to look for that.
C. Local Psychology – Understand the population size, income level and shopping behaviour of all the people nearby to identify which products can be sold easily and regularly.
D. Market Analysis – Have a look at all the new evolving trends such as online grocery store franchise shopping, eco friendly packaging and discounting.
2. Franchise Business Model
Before directly entering the grocery store franchise market business you must know what a franchise model is and how it works.
It is basically a collaboration between the franchisor ( which is an established brand) and the franchisee( owner that runs the store).
This business models generally provided you with readymade brand and brand value, you only take care of the day to day operations.
Advantages –
A. Established Brand Value – You don’t have to put much effort as you get an already established brand with high customer base. Only day to day operations is to be handled by the owner.
B. Business Idea – It removes all the guesswork from operations as each and everything is taught and specified by the brand’s team. This reduces the risk of failure and boosts success.
C. Support and Training – Franchisors are very appealing nowadays and they provide with marketing, operational training, supply chain support etc. they also help in the areas you seem confused.
D. Resources – It provides access to all the inventory management tools, centralised procurement and technology.
Challenges to Anticipate –
1. Initial Investment – Franchisee fees, Setup cost and stock procurement require a significant amount of capital which is not easy to arrange.
2. Royalties – Paying Royalty every time you sell something can be irritating sometimes if the work is not up to date. Royalties affect a lot of profit margins.
3. Compliance – Franchise agreements may impose restrictions on operations and pricing as everything is under the control of the brand and they work according to their convenience.
3. Choice
India is home for many of the most successful entrepreneurs specially in the supermarket field, Dmart, Metro, Best price, easyday, reliance fresh etc.
Many of the successful brands are offering franchisees nowadays which can also help you in earning a significant amount of money.
Choosing the right franchise is going to be one of the critical decisions yet everything depends only on this decision.
As the choice is in your hands always go for the best.
Factors to Consider –
A. Brand Value – Always go for the brand that is liked by people and has a strong customer base that means it has loyal customers. Make sure that the brand also has an amazing market presence.
B. Franchise Fees – You must understand the full payment plan including franchise fees, royalty payment, upfront fees and hidden costs if any.
C. Support and Training – Look for the brands that have nice reviews and provide with comprehensive training and operational support which can be really beneficial in tough times.
D. Offerings – Always ensure that the franchise aligns with local customer needs and preferences. It is very important to understand what the local customer needs as they are the only loyal customers.
E. Area Specification – Always ask or check whether the franchisor offers some exclusivity in terms of place or provides a special geographical area to avoid competition from the same brand.
4. Business Plan
A business plan is enough to identify your objectives, strategies, and financial projections. it often serves as a blueprint for operations and a tool to secure funding.
While running a business plans always back you as everything is so uncertain that anything can happen at anytime.
Key Components of a Business Plan
A. Summary – Brief overview of your goals and the supermarket franchise you wish to establish including the location.
B. Market Analysis – All the insights from your research including the target customers and operations. Market analysis benefits in a lot of ways as the previous data can help in predicting the stock which is to be ordered. .
C. Operational Plan – It includes all the details about the staffing, location, inventory management and technology. All the operations must be managed properly for adequate and systematic working
D. Financial Plan – It must cover all the important aspects such as Investment requirements, expected revenues, profit margins and break even analysis so that the franchise gets cleared with all the aspects.
E. Marketing Plan – All the strategies and promotions are done to attract local customers through digital marketing and loyalty programs.
5. Funding
Starting a supermarket always depends on the area, facilities to be provided, inventory and the most important thing which is capital.
Different brands have different locations and the investment can range from 8-10 lakh to 5 crore again depending on the square feet area and a lot of parameters.
Options
A. Personal Savings – If you have sufficient funds to start a supermarket then don’t wait for anyone and go for it as you don’t have to take permission from anybody and you are already financially independent.
B. Bank Loans – Many of the banks offer loans to people under the schemes that are run by the government such as Mudra Loans and stand up India.
C. Government Schemes – Always check for the government initiatives that are really supporting MSME’s in the retail sector. Sometimes you can claim loans at very low interest.
D. Partnership – Always collaborate with the investors who can share the financial burden instead of people who already depend upon you financially.
6. Location
The location of your supermarket is the real game changer, it can either make the business or break the business.
A location with high traffic and high foot fall, easily accessible areas ensures high sales and loyal customers as the local buyers always prefer the local shops which are easily accessible.
Factors to Consider
A. Residential Areas – Supermarkets near residential areas or huge societies attract regular customers that are loyal and promising.
B. Visibility – Always make sure that the store is easily accessible and visible to the audience also ensure that there is ample amount of parking for the customers.
C. Competition – Always choose the location where competition can be managed or you can offer something that is really unique and also helps in making money.
D. Space Requirement – Supermarkets are generally opened in 700 sq.ft to 3000 sq.ft also depending on the budget and the location one is opening their supermarket in.
7. Legal Formalities
Starting a supermarket in india adheres to various legal formalities which, following these properly is very essential to avoid complaints.
Ensure that all the legal formalities are completed so that you don’t have to face any problem while working or during day to day operations.
Requirements
A. GST Registration – For billing and tax compliance, it is necessary to have a gst number.
B. FSSAI license – It is one of the most important aspect as it is necessary for selling food and beverages.
C. Establishment License – Register your store with the local authorities so that they know that you have a store at any such place.
D. Trade License – You can get this license from the Municipal Corporation and grants you the ability to trade good from one place to another.
E. Franchise Agreement – Sign an agreement with the Franchisor stating all the terms and conditions and make sure that you agree to all of them then only sign it.
8. Design and Setup
The layout and design of your supermarket should always enhance the experience of shopping and increase its efficiency to keep more products.
The design should always be attractive and appealing in the eyes that automatically attracts the customer towards the shop and appealing as well as attractive designs generally lead to impulse buying by the customer
Tips For Setup
1. Product Placement – Always use your mind and then take the decisions, place all the high demand items at the eye level and all the impulse buy products or cheap products at the cash counter.
2. Ambience – Create a welcoming environment with adequate lighting and proper led lights that are bright enough to make all the products shine.
3. Technology – Always go for the brands in terms of technology, install a reliable Pos System, inventory management system and security cameras that enhance the security of your supermarket.
4. Aisle Design – Ensure that the aisle is spacious and well organised for easy navigation and accessibility to the consumers.
9. Recruitment and Training
Your staff is going to be the main representative and face to the supermarket when you are not present.
Franchisors ensure that the staff gets proper training and knows how to attend the customers and handle all the operations when the owner is not present
Tips
A. Hire Local People – Always employ the individuals that know the local people, language and are a part of local people in order to remove interaction barriers.
B. Incentives – Always give a recognition to the emoloyees and motivate them by offering performance based incentives
C. Cross Training – Train staff to have multiple roles so that you can consider anyone for billing , stocking and customer assistance.
10. Marketing
Marketing is one of the major factors in a supermarket especially at the initial stages. Both traditional and digital marketing can help you in getting recognition and establishing your brand.
Marketing Strategies
A. Launch Event – Host an opening event with discounts and attractive offers that automatically attracts the clients.
B. Digital Marketing – Leverage all the social media platforms, email campaigns and google ads.
C. Collaboration – You must partner with local businesses and appear at local community events to increase your visibility and gain the trust of the local public.
D. Loyalty Programs – Introduce Innovative Schemes such as reward points or cashback programs to encourage repeat and loyal customers.
E. Local Advertising – Use banners, flyers and daily newspaper adds to target nearby residents.
Check out this: The Cost Of Opening a Grocery Franchise in India
Conclusion
These were some of the best techniques to open a grocery store franchise in india, if you tend to open a grocery store while keeping these steps in mind, you are going to run the business smoothly.
Franchises provide training and marketing support which results in growth at a nice rate and the consistency of the product is also maintained.
Once all the legal formalities are completed you can move to design and setup.
Design should always be appealing and attractive, try to keep unique products that generally lead to impulse buying.
By using all of these tips you can easily open a grocery store franchise.
