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How to set up a Grocery/Kirana Store

To start a Grocery Retail/Kirana Store business there are certain rules that must be heeded to. When you plan on starting a business you must be sure about what you are dealing with, what you will be facing, and how to sustain in the market.

There is a Grocery store at every Nukkad / Corner of our locality, known as “Kirana Wala”. It is not easy to start a  business in India, but what is more difficult is to stay relevant in the business for long and earn profits.

People in India want to experience the digital revolution happening across the world, indian consumers.are shopping online and megaliths from West like Amazon and Flipkart, BigBasket from India have joined the race to provide groceries at cheapest and fastest routes. But our nearby shops or Nukkad stores are here to stay, to cater to people who like to have a chit-chat with their grocer while buying groceries.

Let’s look at the basic rules before opening a Grocery Retail Business in India

Location –

  1. The first step is to find a perfect location for your store which can actually caters to 300-400 families.
  2. Also look for the competition, competitors are good for thriving your business but they should not be over exceeding the market demand. In newly developed areas, retail stores have higher success rates.
  3. Rent can create a big hole in the pocket for first few months. So look for a place where the rent is not more than 5% of your expected sales.

Investment –

  1. Setting up your store requires a lot of capital expenditure which includes, racks, refrigerators, fans/ACs. But you need to decide first which format you are building.
    1. Mini Supermarket –  Mini supermarket has aisles where  a customer walks in and puts items into the cart and moves to cashiers for checkout. It requires a bigger space, ranging from 1000-4000 sqft, cashiers, racks, ACs, POS(Point of Sale) device, refrigerators, storage area, etc.
    2. Kirana store – These are relatively smaller stores ranging from 250-1000 sqft and are located in every residential area. The stock maintained  is limited to high turnover products and don’t require customers to be let inside the store.
  2. Other variable expenses are merchandise cost, sales staff, delivery and shipping charges, all directly related to sales volume. Anticipating the consumer demand in the area will help lower down these costs.

Services –

  1. Due to increasing competition from organized retailers, Grocery Retail/Kirana Store need to improve by increasing product categories, with improved aesthetics of store, and provide services like home delivery.
  2. Some facilities such as free Wi-Fi while making digital payments can enhance the customer experience, and a few minutes of free Wi-Fi can pull back the customers to the store.

Suppliers –

  1. To find the suppliers, visit the competitor stores and ask details about their suppliers and where do they procure all their merchandise.
  2. Products can be bought either from a distributor, or wholesale market which is mostly cheaper. Also there are services given by distributors which can’t be matched with wholesaler pricing.
  3. There are Cash n Carry stores like Metro, Best Price (Walmart), Reliance Market and e-Distribution companies like BigBasket, Udaan from where a Kirana can buy products, if in Tier 1 cities.

Marketing –

  1. Once the store is opened nearby customers will be aware of it but that is not enough. More buyers and quality customers need to know more about it.
  2. Take the store online, and opening a Facebook page won’t cost anything.
  3. Distribute pamphlets of your store and treat your customers to spread positive word of mouth.

Technology –

  1. The Kirana stores are shifting from manual to electronic billing as the process is fast, convenient, takes less space and cost-effective. A retailer can start his IT journey with a simple POS system.
  2. The POS technology allows easy deployment and integration of all the related hardware and software in a multi-store situation for the Grocery Retail/Kirana Store to have total control over their business at any given time.
  3. There is need to focus on implementing basic features such as billing, and inventory management, and this can be followed by customer relationship management (CRM) system.
    Read more about other Technological Solutions for Grocery Retail/Kirana Store.

Legal Compliances –

  1. The importance of obtaining licenses cannot be ignored in any business and a grocery store is no different than a big business
  2. To know more about Business Structure, Trade Licenses, and Shops and Establishment Act, refer to the article which will help you to find out the Legal Compliances

Financial Plan –

  1. Create a proper Financial plan and estimate expenses for at least 1 year.
  2. Look for Financial support from Government Banks or NBFCs and don’t take too many loans from friends or repaying with too much interest will be a burden.

Starting a new business is like writing a new chapter or adhyaaay in the book of life, which will make it a bestseller. Best of luck.

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