The Total Investment Required to Start a Supermarket Business in 2021

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The rise of supermarkets in India 

Over the past decade, we all have seen a tremendous rise in the number of supermarkets in our country. From 500 supermarkets in 2006 to 8500 in 2016 to more now, the number has just been increasing. And rightly so, because it provides the efficiency and efficacy the Indian customers want. 

You see, the customer is getting busier and hence they get very less time for shopping and when they do, they want most of the products under one roof. Supermarkets do just that for them. Also, supermarkets are generally located in prime locations, so customers even get easy reach for them as well.  

Is Supermarket a profitable business model?

The rise of supermarkets is just not restricted to big cities anymore. They are spreading towards towns too, so there are enough customers to cater to. Also, given that supermarkets are growing continuously, they have caught the attention of businesses investing in them in a legit way. Big companies are looking towards supermarkets for collaborations. Furthermore, supermarkets also provide some warm complimentary services like special discounts, smart services or even washroom facilities and it only adds to your profit. 

So given all the fair points, yes there is a profitable rise of supermarkets in the Indian market and you can use that in your favor.

How much money is required to open a supermarket?

Opening a supermarket in India could take an investment up to Rs 2 crores, depending on the store size and location.

First, get the whole business plan for your supermarket ready. That is, the amount of capital you are willing to put into it, how much of it would be bootstrapping, and for how much you would be looking for loans and investments, and also having pre-planned money management for the future recurring expenditures.

Choosing a perfect location would take some time. Hence make that decision carefully.  Fixtures for the store would also require quality investment so be aware of that too. Consult Instor for knowing more about the best fixtures which are trusted by people all over India.

And then comes the products and your manpower and no one would deny that they will be the king of your supermarket, so having a clear thought about them is also a must. 

Let’s look at the costs involved one by one-

  1. Renting a space – You are going to need at least 3200 sq ft of area for your supermarket. Now since it’s such a major decision, you must personally go through as many options as possible. The rent can easily range from Rs50,000 to 10 lakh.
  2. Designing the store – For higher efficiency, you would need a good investment in innovative store designs and fixtures. With time, you will increase the size of your supermarket, so make sure that you design it in a way that it doesn’t become a handicap for you in the future.
    Taking into account customer experience is crucial in today’s market. We can’t also deny that an aesthetically designed space provides for a good customer experience. So, the point is, don’t shy away from good design, services, and utilities, because a good customer experience improves loyalty, leading to better profits.
    Up next are fixtures, such as shelves, mirrors, storage racks, etc, so give a thought to that too. Include the installation cost and you have an approximate amount for design and fixtures. Check out Instor for some wonderful fixture options for your supermarket store.
  3. Sourcing the stocks- Your initial investment in your supermarket stocks won’t probably include multiple options of a product, but still cost you good amounts. Contact various sellers to get comparative quotations. Here are some common things a supermarket generally has –
    • Hygiene and toiletries
    • Beauty and skincare products
    • Home decor and kitchen items
    • Snacks and bevereages
    • Toys and board games
    • Grocery and dairy products
    • Electronics
  4. Getting a permit- Getting a permit is crucial and there are different licenses and registrations that you would require. First, get a trade license as a business owner from the local municipality and that would take around 8 days. Furthermore, get access to the FSSAI license too and register your supermarket under the shops and establishment act. And if you plan on expanding in the future, you would also need a central license for head office.
  5. Operational costs – There are multiple recurring operational costs, which require equal consideration. Let’s see some examples.
    • Electricity bills
    • Security guard and CCTV surveillance
    • Billing software, electronic payment system
    • Advertising in the area
    • Salaries of the staff
    • Logistics and home delivery
    • Inventory storage and maintenance

Opening a supermarket is not a small task and it requires patience and determination. Hope this guide would help you with all your doubts about investments and more when starting a supermarket business.


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