Home Business Tips Effective Steps To Start A Grocery Store In India With Lowest Investment
Tips To Open A Grocery Store in India - Khatatbook

Effective Steps To Start A Grocery Store In India With Lowest Investment

by Khatabook

What Is A Grocery Store?

A typical grocery store is a retail store for households’ kitchen requirements such as pulses, rice, wheat, spices, etc, household plastics mugs, brush, buckets, etc and other household requirements such as detergent, sanitizing liquids, soaps, toothpaste, bathroom, and toilet cleaners, etc. To open a successful grocery shop, you need to have enough grocery products that you can sell. Grocery products depend on the size, capacity, and money invested by the shopkeeper to accommodate more or less in the grocery store. Sometimes the grocery store consists of vegetables and fruits in a certain quantity to support the needs of the people.

Profit Margin of a Grocery Store in India

The profit margin for the grocery stores in India ranges from 2% to 20%. The grocery is a lucrative market in India, many foreign, Indian, and local brands compete for the market and ensure they have their products in the grocery store. 

The towns and cities in India are growing at a faster rate making India progress to be one of the three global economies. The retail store or the grocery store has tremendous potential to grow in almost all the small, big, and metropolitan cities. People are migrating from many small towns to large cities for growth and to make their living, in such a condition, there is a growth of purchasing power of the people in all corners of India. The grocery items profits range from few rupees to thousands of rupees depending on the items. Thus, the grocery store investment is profitable and provides high returns in the long term. 

How Much Money Is Needed To Open A Grocery Shop In India?

The grocery store investments start from anywhere from Rs. 10 Lakh to 2 Crores. It depends on the size, shape, capacity, and infrastructure, etc of the store. You need to look at the fixed investments and the float investments. The cost of a grocery store in India include the following:

  • Store infrastructure including the shelves, furniture, display racks, etc
  • Equipment such as computers, cash registers, security cameras, and time clocks, etc
  • Inventory for things and items for selling
  • Salary for the employees
  • Tax, fees and permits, etc
  • Insurance for the shops and employees
  • Marketing and advertising costs
  • Materials for daily cleaning the store with materials
  • Electricity and other equipment such as AC, fan, and lights, etc and
  • Rental cost

How To Start A Grocery Store?

The effective business plan for setting up a profitable grocery business consists of the following steps:

  1. First is GST registration – If your annual turnover is less than Rs. 20 Lakhs then must get your 15 digit GST registration number
  2. Licenses – Get your food license, the shop, and establishment registration and entity registration. Visit the license authority office to get this done
  3. Locations – Choose the appropriate location or locations for your shops.
  4. Investment in-store infrastructure – After deciding the location you need to make your store attractive and display the items in the store.
  5. Customers – You need to make a small study of your customer’s preferences, living standards, and market size.
  6. Study your competitions – You need to understand your competitions around your store and think of products that customers buy from you.
  7. Vendors – Having tie-ups with few vendors to deliver you the goods that you want to sell in the store.
  8. Product price – Set the right and competitive prices for the items in the store. Keep the margins of 25% to 40% for the items, but not necessarily all the items.
  9. Staff for your store – Hire some staff or helpers for your store from the store location vicinity to help you around.
  10. Have an online presence – It is beneficial to keep an online presence for your store so that people can order items online from your store.
  11. Advertise – You need to prepare pamphlets, notices, and spread the store’s presence around the locations and even far and wide.
  12. Digital Ready – Keep electronic weighing machines for scaling items along with computers ready for billing and be equipped with digital payment methods such as credit/debit cards, Phone Pe, PayTM, Google Pay, etc for the methods of payments.

Benefits Of Grocery Shop Franchise

The franchise business has a lot of advantages they are as follows,

  • The brand name will increase the selling potential 
  • The success rate is more 
  • Inception time is less and can establish quickly 
  • Support and training will be provided at no cost
  • An established business model
  • End to end assistance will be offered 
  • Funding option is secure 
  • The purchasing cost is reduced due to purchase in volume 
  • Networking with peers will allow you to deal with healthy competition


Starting up the grocery store in India has a lot of advantages and is a lucrative business. The trends show that India will grow around 10% annually. The purchasing power of the people has increased tremendously over the last decade. This is the right time for the investors and businessmen to start a grocery confidently by assessing and understanding various benefits and risks of a startup grocery store.

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