The Challenges and Rewards of Owning a Grocery Store
Every neighborhood has at least one grocery store, whether it's a huge supermarket or a smaller retailer that specializes in organic or ethnic foods. Grocery storeowners face countless decisions every day about product inventory and customer service. However, the rewards of owning a business that has a steady customer base in both good and bad economic times certainly offsets the added hurdles one must face to do so.
A $500 Billion Industry
There are nearly 35,000 grocery stores in the United States, with total annual sales of nearly $500 billion. Prominent chains such as Kroger and Safeway dominate many US markets, but thriving right alongside these familiar names are niche stores such as Whole Foods and Trader Joes, that cater to a health-conscious clientele. There are also neighborhood markets that specialize in exotic products and personalized service.
The average American visits a grocery store twice a week. An entrepreneur interested in servicing these customers will have to decide whether to explore franchise opportunities, or launch as an independent retailer. As the market is dominated by franchises, the independent store might have a more difficult time breaking through, but can succeed with the right location and ownership.
As with any business, however, the more time that is devoted to research and education, the more likely the result will become a stable, profitable venture.
Comcash offers several resources for entrepreneurs considering ownership of a grocery store, or those already in the process of building or purchasing this unique type of retail establishment.
Tips to Get You Started
Sometimes the number of details to address when starting any new business can be daunting. Opening a grocery store carries additional considerations that must also be fulfilled, or the owner may face a wide assortment of challenges.
Here is a brief overview of some of the most prominent issues. For additional information, other resources are listed below.
- Franchise or Independent?
As stated above, the industry has several prominent national brands already established. With a franchise you'll receive help in getting started, but pay for the privilege of this assistance and instant name recognition. You'll avoid the franchise fee with an independent store, but will now be in competition with the Safeway and Kroger locations of your community for customer loyalty.
- Hire an Attorney
Since you will have to deal with federal, state, city and country rules and restrictions regarding the sale of alcohol, the sale of prescription drugs if your store includes a pharmacy, and the location of your store, it's advisable to hire an attorney experienced in such matters.
- Safety First
A security system, particularly one that incorporates video surveillance, is an essential step to protecting your customers, employees and inventory.
- Customer Service is Key
What separates one grocery store from another? While location and product inventory are significant factors, customer service can also make a difference. To make certain you are helping your customers avoid 30 minute waits in the 'Express' aisles, invest in an efficient and reliable POS (point-of-sale) system to expedite purchases. Customers that can find the products they need and complete the checkout process quickly are more likely to come back.
- Get Organized
Even after legal and zoning issues have been resolved, running a grocery store business means keeping track of customer and product data and using that information to better serve your market. Many POS systems, such as the one provided by Comcash, also offer inventory management and back-office administration reports that can impact management decisions.
- Check out the Competition
What are grocery stores in your city doing to attract customers? More important, what are they not doing? Is there a market that has been neglected? By visiting your competition, you will not only find ideas that can be adapted for your store, you may discover an untapped niche that your business can serve.
Read our whitepaper on "The Grocery Store Owner's Strategies to Success"
Check out our FAQ page for answers to the questions many prospective grocery storeowners ask.
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