How to Start Grocery Store in Pakistan?

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    grocery-storeThe retail industry is one of the fastest growing industries today and is considered as a vital part of our economy. The chief purpose of this industry is to provide goods and merchandise to the consumers. They get their products straight from the manufacturer or via a wholesaler or distributor. Ultimately, these products are sold to customers for consumption. These goods are vast and varied. Retailers may sell anything and everything from food to apparel to electronics and so on. A grocery store for the most part offers food (both fresh and dry) and other household essentials. Starting a grocery store business may pose as a challenge if you are not equipped with the proper information. The business has several aspects that you need to focus on and study if you want your efforts to yield results.

    Begin with yourself. You don’t need to have prior retailing experience. All you need is the right attitude and the ‘customer-first’ mindset. An effective grocery store owner knows how to multitask. He is able to make swift yet calculated decisions. He is hard working and is not afraid to work long hours.

    Planning is essential as you begin to stock up your store. This keeps you form buying items that at first may seem like a good idea until you notice that they’re just gathering dust on the shelves. Unless you have experience to back you up, there is no way you can be 100% correct in your inventory forecasting that is why you need to plan and at the very least conduct a market research. With adequate planning and research, you will be able determine what you need to buy and how much. If need be, conduct a survey. You can also ask the manufacturers themselves for their most popular product. Be keen though for they may not always give you a straight answer.

    Exercise diligence in scouting for the best possible resource for your products. See to it that you get the lowest deal thereby allowing you to give the best mark-up price.

    Enticing your shoppers with the products you have on hand is difficult if you have limited space. Therefore, you need to be crafty. Make sure that impulse items (magazines, sweets, etc) and high priced items are allocated in an area within your store where there is heavy customer traffic. See to it that your fast moving products (milk, bread etc) are displayed near the back of the store space. The idea here being, your shoppers will have to pass through several aisle of products they may not have considered on buying had they not seen it.

    A final note. In light of the number of grocery stores and supermarkets out there, is there room for more? Most definitely! The key is to create your own market niche. To do this, you need to have a unique selling point. You may want to sell hard-to-find premium products that most supermarkets don’t have on stock. Use your creativity. Think of a distinct concept that is entirely yours. Or you can improve on what’s already out there. The key is to offer something that customers cannot get anywhere else.

    The retail industry is one of the fastest growing industries today and is considered as a vital part of our economy. The chief purpose of this industry is to provide goods and merchandise to the consumers. They get their products straight from the manufacturer or via a wholesaler or distributor. Ultimately, these products are sold to customers for consumption.

    These goods are vast and varied. Retailers may sell anything and everything from food to apparel to electronics and so on. A grocery store for the most part offers food (both fresh and dry) and other household essentials.

    Whatever the economic conditions are, people have to purchase groceries to fulfill their daily needs.  Groceries sales may drop but they never stop. There are number of grocery stores today in every small or big city of Pakistan. In metropolitan cities, the competition among these stores has increased manifolds in the last decade. The target market of these grocery stores is the consumer living in nearby localities. A person residing in one area will never go to purchase grocery from another area.

    Location is an important feature in this business. If the grocery shop is not in a good location, it will never be successful. Location means an area where people visit everyday like market places or where there is population but no convenient store nearby.

    Starting the Grocery Store

    The retail industry is one of the fastest growing industries today and is considered as a vital part of our economy. The chief purpose of this industry is to provide goods and merchandise to the consumers. They get their products straight from the manufacturer or via a wholesaler or distributor. Ultimately, these products are sold to customers for consumption.

    These goods are vast and varied. Retailers may sell anything and everything from food to apparel to electronics and so on. A grocery store for the most part offers food (both fresh and dry) and other household essentials.

    Starting a grocery store business may pose as a challenge if you are not equipped with the proper information. The business has several aspects that you need to focus on and study if you want your efforts to yield results.

    Begin with yourself. You don’t need to have prior retailing experience. All you need is the right attitude and the ‘customer-first’ mindset. An effective grocery store owner knows how to multitask. He is able to make swift yet calculated decisions. He is hard working and is not afraid to work long hours.

    The first step in starting a grocery store is to find the best possible location for the store. Main markets have more rents and good wills. Posh areas of the cities have well reputed shops. The owners of plazas usually demand good will and advance rent for at least a year or minimum 6 months. Once you have found a location, you’ll have to renovate the shop according to the store requirements. After renovation you have to start purchasing whole sale goods from distributors. Running a shop also requires one or two workers. Number of workers depends on the extent of the business. Purchasing goods is not a difficult task these days, especially in big cities. There is a strong network of distributors in the market who provide shopkeepers different products every day from the factories or the main suppliers.

    Expenses

    The initial investment required to setup a small scale grocery store is around Rs. 0.5 million for only the supplies inside the shop. The rent of the shop is not included in this amount as shop rents vary from location to location. It could range from Rs. 1 million to Rs. 10 million. Once you have purchased all the supplies for the shop, then you have to market your store. Building relationships with the customers by giving discounts and having unique products which no other stores have is a good way to boom business.

    One can save the expense of having a billboard of the shop by getting it sponsored from a renowned brand like Zong, Pepsi, Coca Cola, nestle etc or else you will have to pay the tax on that bill board.

    Grocery stores also need freezers to stock beverages and ice creams. These days all you need is the space for the freezers, the rest is the company’s responsibility.

    Companies like Pepsi and coca cola provide free freezers to stores for marketing their brand. However, a continuous supply of electricity is also required to keep the freezers running. For that you should also have a generator to combat the load shedding.

    We can differentiate the small level grocery store with a medium size grocery store in terms of investment. A small grocery store can be started by having supplies worth of Rs. 0.5 million and a medium size grocery store can be started by having the supplies of Rs. 1.5 million.

    Procedures and profits

    The day to day selling gives you profit on every single product. The best thing for a grocery store is that the products/goods you keep in the store are not perishable products. In extreme cases, you can keep products usually for about 6 months without selling. If you have a store in a good location, your products will be bought on daily or weekly basis. The multinational companies don’t give supply to shopkeepers on credit, you have to pay cash first to buy stock but the local products can be bought on credit. The credit time and the amount of credit depend on the relationship with the distributor. This also varies from distributor to distributor.

    Profit depends totally on the store’s location and number of customers you are dealing every day. Some say that with an investment of Rs. 1.5 million on medium size store, Rs. 20 thousand to Rs. 30 thousand monthly profits can be earned, while others say that Rs. 50 thousand monthly profits can also be earned from same investment. It all depends on your way of selling, having a good relationship with your customers and most importantly having a good relationship with distributors. One can increase the profit margins also by getting discounts from distributors through bargaining. From the above estimate, one can calculate the profit margins from small grocery shops and big grocery stores.

    Tips

    • You      should never damage your relationship with your customers because they are      the real assets to the business. They are beneficial for word of mouth      marketing.
    • Always      have a good relationship with distributors to have longer credit times and      discounts on the supplies.
    • Keep      checking the market prices of the competitors and different distributors.
    • Location      of the store involves many other features. For instance, a grocery store      situated inIslamabad     was in an ideal location. It closed down simply because the stairs of the      grocery store were loose and risky which made customers hesitant to go there.      Similarly shop interiors also matter in increasing the sales. Above all      customer dealership is also very important.

    Unique Idea

    Once you have established a grocery store, you can market your store through brochures and other advertising tactics. Home delivery service can also be started by placing orders through phone. Product prices remain same but you could charge extra amount for home delivery on a single order. This service would give an edge to your store over others. Groceries are not fresh produce like vegetables or fruits which are handpicked by the customer. Grocery items are same for every one with same quality and packaging, so they can be easily ordered by sitting at home.

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