How To start a Small Grocery Store in India (Full Business Plan)

You have reached the right place if you are looking for ways to open a grocery store in India.

A small grocery store in India can be a profitable business idea. India’s population is growing and so is the purchasing power.

People are more inclined to shop in new shiny grocery stores due to the economic boom and rising spending power. They enjoy large aisles filled with neatly stacked products in complete AC comfort. You will find everything you need, including dairy, cereals and pulses.

If you are looking for a way to make a profit from your grocery store investment, whether it be a Kirana or new-age shiny store, then read on to learn how to manage and grow one.

Create a Business Plan

Before you open your grocery store, you will need to create a business strategy. It is essential that you have a deep understanding of your customers as well as the competition around you.

You must be precise in your market assessment. To succeed in this business, you need a business plan. It is worth taking the time to analyze your customer base. This will allow you to determine the size of your market and their buying preferences. This will help you choose the best place to open your shop, determine the products that you wish to sell, and set your pricing strategy.

Your grocery store business will be affected by many factors, including your customers’ backgrounds, whereabouts, living conditions, product preferences, when they shop, how much they spend, and how frequently. Your grocery store’s success or failure will depend on your customers’ demand. You must understand the needs of your customers and find products that meet their requirements. Compare your competitors to find out what your customers think about your products.

This is a low-margin business so you need to ensure that your inventory purchases are accurate. A strong network of vendors is an asset. Make sure you don’t stockpile inventory for more than 20-25 business days.

Also read: 12 Things You Need to Know Before You Are a Fruit Retailer

Target Market

A grocery store is essential for the running of a household. To accurately assess your target market, you need to pinpoint the ideal location for your small grocery shop business. Then evaluate the potential of that location and determine the right customer mix.

Also read – Everything You Need To Know About Starting A Successful Namkeen Factory

Choose the right location

Your location is crucial as your customer base varies from one place to another. Products used in urban areas will differ from those used in rural areas. The age of your customers will also influence the products you need to stock in your grocery store.

Look for a central location in the city or near a busy market. You could achieve a positive outcome if there are many people shopping nearby. Good location is essential as it will ensure that you get a lot of footfall each day.

You will also need to invest a lot on marketing and air-conditioning if you want to open a new grocery store or convenience store. It is possible to have both the best and the worst of each, creating the perfect mix for your customers.

Setup costs for the Business

You have now created a plan for a grocery store and are ready to start setting it up. It is up to you to determine how much financial expense you will incur in order to set this up.

Many factors influence the cost of starting a grocery store, including the location and rent, inventory needed to purchase, how many salespeople you will need, and what the initial startup costs are.

You will need furniture to set up your grocery store. This includes racks that can display different products and a table with drawers. A basic grocery store can be set up in your locality for as little as Rs 50,000. You will need to spend more than Rs 2 Lakhs to open a modern grocery store, convenience store, or store at a mall with many sales people. You can always get a bank loan if the cost exceeds your budget.

Make sure that you have a clear and organized inventory so that customers can quickly find what they need. Also, keep track of inventory and products sold. Keep proper books and cash flow records.

Also read – 15 Best Ideas for Business Under 2 Lakhs

Completion and Obtaining of Mandatory Licenses

There are legal requirements and licenses required to open a grocery shop in India. These include entity registration, food license, shop, and establishment registration. These are legal requirements and you must visit the license authority office in order to obtain the grocery store licenses. To be sure you understand the legal requirements of setting up your business, get in touch with a CA.

Pricing for Goods

You will need to determine the price of the product before you open your grocery store. This will influence the number of products that customers buy. This will directly impact the profit and revenue of your grocery shop.

The right prices will generate enough gross profit to cover overhead costs and produce a decent amount of net profit. You have two options when it comes to pricing: margin (selling price-based) and markup (cost-based).

Grocery stores have a mark-up of 33% to 67% or margins between 25% and 40%. Grocery stores are unable to purchase large quantities of inventory so it is best not to offer low prices. This does not mean that you should neglect to provide convenience and good service to your customers.

Also read – 15 Profitable, Super-Easy Retail Start-up Ideas

Hire Sales Staff

The size of your store and the requirements for sales staff will determine how many people you need. Staff members must be trustworthy and alert. You want them to be able handle large crowds with smiles on their faces. They must also have a good knowledge of the inventory, and be well-trained and motivated.

Register your business GST

Source Image: Capital floating

You will need your GST registration to open a grocery store in India. A GSTIN is a 15-digit code number, or unique GST identification number. If your annual turnover exceeds a certain number, registration is mandatory.

GST registration may be required if your grocery store’s annual turnover is less than 20 Lakhs. If the annual turnover exceeds Rs 20 Lakhs, it will be required to register under GST.

Most businesses will avoid transactions with non-GST registered companies. This is because every transaction can be reverse taxed. You will be required to file 3 monthly GST returns as well as 1 annual GST return.

Start your Business Online

It is essential to use the internet to market your grocery shop. An online store website is essential for your grocery store. It will allow you to accept orders and have it delivered directly to the customers’ homes. These facilities are essential for today’s consumer. You can also sell grocery products online, in addition to a physical store.

Promote Your Business

Source image: The balance

Advertising is essential for any business to be noticed. To ensure that your grocery store draws maximum customers, it is important to tell your family, friends, and relatives about your new venture. Word-of-mouth advertising is the best form of advertising.

A good relationship with customers is the best advertising medium. Depending on the size of your market and custom, you can choose from flyers, newspapers or TV. You also have options for advertising media such as business pages, television, newspaper, and TV.

To attract customers, you can also put up a drive-by neon signboard. Window displays that are attractive could be a great way to attract customers to your grocery store.

Profit Margin & Future

A grocery store business’ profit margin can vary from 2% to 20% depending upon the amount invested and the income generated.

As India has a large population, the future prospects for grocery stores are bright. Every household needs grocery staples.



India has a large population and a booming economy. This means that people are willing to spend money on the commodities they use every day. There are many opportunities. All you have to do is focus on your customer and invest in technology.

Similar Articles



Please enter your comment!
Please enter your name here



Most Popular