written by Khatabook | June 8, 2021

Steps To Start A Grocery Store In India With Lowest Investment

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Table of Content


Are you looking for a business idea that can give you a stable income and still have plenty of scope to grow? If yes, then consider starting a grocery store. In the last few years, there has been a rise in demand for online and brick and mortar grocery stores. So if you’re ready to take the plunge into this lucrative business, here are some effective steps to start a grocery store business in India with the lowest investment. 

A grocery store is one of the most profitable businesses that you can start with minimum capital. Keep reading to know more details about starting a grocery store business in India with the lowest investment.

Did you know?

Super Bazar opened its doors to Delhiites in 1966 offering a variety of reasonably priced products from vegetables to transistors. In less than 40 years, however, it closed due to losses and allegations of corruption.  

Grocery Store in India with Lowest Investment

India's retail industry is one of the fastest growing industries in the country, with a current worth of $600 billion. The sector is expected to grow to $1 trillion by 2020. In an increasingly competitive market, it can be difficult for small businesses to survive. One way to increase your chances of success is to choose a niche market.

For example, you could open a grocery store that specializes in organic and locally sourced produce. Not only would you be able to tap into a growing trend, but you would also be able to keep your costs low. Another option would be to open a store that caters to a specific ethnic group. This could be done by stocking products that are popular with that demographic and hiring staff who speak the language of the target market. By doing your research and focusing on a specific niche, you can open a grocery store in India with a lower investment and greater chance of success.

Also read: How to Start an Agarbatti Business - Agarbatti Making Business Plan, Licenses, & more

What is a Grocery Store?

A grocery store is a store that sells food and other household items. In India, it is common for people to buy their groceries from small, independent stores rather than large supermarkets. These stores are typically family-run businesses, and they often specialize in selling specific types of food. For example, there may be a grocery store that specializes in selling spices or one that only sells fresh produce. Grocery stores in India often sell a wide variety of items, including produce, meat, spices, grains, and household goods. They may also have a section for prepared food, such as snacks and drinks. While some grocery stores are open all day long, others may have specific hours during which they are open for business. Because they play an essential role in many people's daily lives, grocery stores are an integral part of Indian culture.

Background of Grocery Business in India

In India, grocery store is a relatively new concept. For centuries, residents have relied on open-air markets to purchase their food. These markets, known as "mandis," provide a wide variety of fresh produce, spices, and other staples. In recent years, however, the grocery store business has become popular. Thanks to the growth of the middle class, there is an increased demand for convenience and variety. As a result, grocery stores are popping up all over India. While they may not be able to compete with the mandis in terms of price or selection, they offer a more comfortable shopping experience that appeals to many customers.

How to Start a Grocery Store in India with Lowest Investment?

Choose a Location for Your Store

The first step to starting a grocery store in India is choosing a location for your store. The ideal location for a grocery store business is one that is easily accessible by potential customers and has enough space to accommodate a large number of shoppers. Additionally, the location should have adequate parking and be close to other businesses, such as restaurants and banks. Once you have selected a location, the next step is to obtain the necessary permits and licenses from the local government. This can be a lengthy process, so it is important to start early. Once you have obtained all the necessary approvals, you can begin planning the layout of your store and sourcing suppliers. With a little bit of planning and hard work, you can soon start your very own grocery store in India. 

Secure the Necessary Licenses and Permits 

Before starting a grocery store business in India, you will need to obtain the necessary licenses and permits. These will vary depending on the state where you plan to do business, but they typically include a license to sell food products and a retail business permit. You may also need to obtain other permits, such as fire safety or health department permits. The best way to find out what licenses and permits you need is to contact your local chamber of commerce or city hall. Documents required for the grocery store business in India are:

  • Registering your business under a sole proprietorship, partnership, or other ownership options
  • Getting a trade license for your store
  • Registering your business under the Shops and Establishment Act of 1953
  • Obtaining an FSSAI license
  • Tax-related registrations like getting a TAN, GST number, etc.

Once you have obtained all of the necessary licenses and permits, you will be ready to start your grocery store.

Lease or Purchase Retail Space 

There are a few key things you need to do in order to start with the lowest grocery store investment in India possible. First, you will need to lease or purchase retail space. This can be a bit of a challenge, as grocery stores require a lot of square footage. However, if you are willing to lease a smaller space or look for less expensive options, you should be able to find something that fits your budget.

Once you have secured your retail space, you will need to stock it with groceries. This may seem like a no-brainer, but it is important to remember that you will need to purchase enough food to meet the demands of your customers. You will also need to factor in the cost of employee salaries and other operating expenses.

Tie Up with Wholesalers and Manufacturers

In order to get the best deals on food items, you must build strong relationships with wholesalers and manufacturers. This will help you get discounts and also ensure a steady supply of goods.

Hire Experienced Staff

Lastly, stock your store with experienced and friendly staff who know how to handle customers efficiently. Employees who go the extra mile will help create a positive image for your business and ensure repeat customers.

Stock Your Store with Food and Beverages 

In India, there are a variety of regional and religious food preferences, so it is important to do research in order to identify the products that will be in demand. Once the shelves are stocked, effective marketing and advertising are essential to draw in customers and build loyalty. Customers should be made aware of special deals and promotions, and they should always feel welcome in the store. Following these steps can set your new grocery store up for success.

Market Your Store to Attract Customers 

Once you have a solid plan in place, you can start marketing your store to attract customers. There are a number of ways to market a grocery store, including online advertising, flyers, and word-of-mouth. 

Also read: 10 Best Wholesale Business in India 2022-23

In today's digital world, you must have an online presence for your business. Create a website or an online store where customers can order products from the comfort of their homes. You can also use social media platforms like Facebook and Instagram to reach out to a wider audience.

Manage Your Inventory and Pricing

When it comes to setting prices, there are a few things you need to take into consideration. First, you need to find a balance between making a profit and being competitive with other stores in your area. Second, you need to consider the cost of the items you're selling and the markup that you're comfortable with. Lastly, you need to make sure that your prices are updated regularly so that they reflect any changes in the market. 

With these simple tips, you can easily set up your own low-cost grocery store in India and make a success of it!

Advantages of Starting a Grocery Store in India

Starting a grocery store in India can be an extremely rewarding experience. For one, the country's sheer size provides a vast potential customer base. 

As a result, there are many advantages to running a grocery store in India.

  • The country's large population provides a large potential customer base.
  • Economic growth is driving up disposable incomes and creating new consumers.
  • The rise of the middle class results in greater demand for quality products and services.
  • The growing urban population is providing new growth opportunities.
  • India's young population is an increasingly important consumer demographic.
  • The country's favorable demographics make it an attractive market for international retailers.

Challenges Faced by Grocery Store Owners in India

Owning a grocery store in India comes with a unique set of challenges. From finding the right location to dealing with suppliers, here are six challenges that grocery store owners face daily:

  • Finding the right location: A grocery store needs to be conveniently located near high foot traffic. However, rental prices for commercial spaces can be sky-high, making it difficult to find an affordable option.
  • Dealing with suppliers: Grocery stores need to maintain good relationships with suppliers to get the best product prices. However, dealing with multiple suppliers can be time-consuming and lead to logistical headaches.
  • Managing inventory: Keeping track of inventory levels is crucial for a grocery store owner. If the inventory is not managed properly, it can lead to lost sales and unhappy customers.
  • Hiring staff: Grocery stores need to be staffed with trustworthy and competent employees. However, finding good help can be challenging, especially in smaller towns and villages.
  • Dealing with competition: In India, there is always competition from other grocery stores, as well as from large supermarkets and online retailers. This makes it important for grocery store business owners to always look for ways to improve their business and stand out from the crowd.
  • Handling finances: Maintaining financial stability is essential for any business owner, but it can be especially challenging for those in the grocery industry due to the constant fluctuations in the prices of food and other supplies.

Also read: 15 Best Small Business Ideas for Villages, Rural Areas & Small Towns in India

Conclusion

Grocery stores can play a pivotal role in this development as they are in the center of the community, allow people to buy more healthy and fresh foods, and in their marketing strategies promote the use of fresh and healthy foods by educating their customers about the benefits it offers. Grocery stores can also actively encourage nutrition programs that include using fresh fruits and vegetables, promote the benefits of healthy eating through cooking demonstrations, and provide the necessary tools, resources, and local collaboration needed to improve nutrition education. 

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FAQs

Q: How much money do I need to open a grocery store in India?

Ans:

In India, the average cost of opening a basic grocery shop ranges from ₹1 lakh to ₹2 lakh.

Q: How do I start a small grocery store?

Ans:

You must obtain several licenses before opening a supermarket, including a Food license, entity registration, shop, and establishment registration, among others. Because these are mandatory legal requirements, you must obtain a supermarket license before establishing one anywhere in India.

Q: What are store expenses?

Ans:

Store-level operating costs other than those listed above, including utilities, operating supplies, repairs and maintenance, depreciation and amortization, advertising, rent, credit card fees, and general insurance, are included in operating expenses.

Q: Are grocery stores profitable?

Ans:

The slim profit margins of grocery stores mean that for every dollar in sales, they generate just 2.2 cents in profit (2.2%). Specialty grocers, such as natural food stores, might have slightly higher profit margins.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.