Do you want to know exactly how much it cost to start a grocery store in a small town? If YES, here is a detailed cost analysis for starting a grocery store business and raising finance.

The grocery store is a very lucrative business. Starting a grocery store is a very easy business to start and it is not so capital intensive. Getting the right products that people want to buy and good stock keeping records are the secrets of running a grocery store. A grocery store can be run offline in the conventional retail store or online on an online e-commerce retail site.

Having provided you with a:

  1. Industry Overview
  2. Market Research and Feasibility
  3. Grocery Store Business Plan
  4. Grocery Store Name ideas
  5. Licenses and Permits
  6. Grocery Store Marketing Plan
  7. Cost of Starting a Grocery Store
  8. Marketing ideas & Strategies

We will consider how much it cost to start a grocery store from scratch including the operating costs. You can also venture into mini-grocery sales. When people are looking for specialty foods or ingredients that can’t be found at the corner store or neighborhood supermarket, they typically head to small grocers, also called mini-grocery stores. Such retail establishments sell food and items that are uncommon and not carried by bigger stores.

Opening a mini-grocery can be a lucrative business venture, especially if you live in a city with little competition. However, today many of the small independent grocery stores in  rural communities have either experienced financial difficulties or have been forced to close.

  • Industry Overview

In recent time, the retail landscape has seen tremendous changes in the last 20 years; it has grown from the usual mom and pop outlets, where one family member handles the cash register, another stocked the shelves, and another unloaded the delivery truck; to a more organized and far reaching venture. The introduction of franchise and online store makes it easier for a retailer to reach out to a larger market far beyond the areas where his physical store is located.

Small chains and independent grocers still dominate this industry, but national chains, such as Kroger, are increasingly growing in dominance. Mass merchants, such as Wal-Mart, are competing with grocery stores at their “supercenters” by offering lower prices through lower cost structures.

Wal-Mart is now the world’s No. 1 seller of groceries. Warehouse clubs, such as Costco and SAM’S CLUB (owned by Wal-Mart), can also compete on price by selling in large bulk. Supermarkets have responded to these threats by building larger “superstores.”

It is important to state that the information contained in this article can be beneficial to entrepreneurs and aspiring entrepreneurs in the United States of America, Canada, Australia and the United Kingdom who are currently in the grocery business, those who are considering starting or investing in a grocery, or a community wishing to attract or retain a grocery store.

How Much Does It Cost to Start a Grocery Store in a Small Town?

The cost analysis as it relates to starting a grocery store business in the United States of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations. For instance, most of the goods / products that you are likely going to find in a standard grocery store are of international brand hence if you are able to find the product in a grocery store in the United States of America, you are likely going to find same product in a grocery store in the United Kingdom, in Canada or in Australia.

The truth is that, the price of such good can be same price all across these countries especially when you take into consideration the exchange rate of the country when compared to the United States Dollar.

Other factors that may be slight different in terms of costing when it comes to starting a grocery store business in any of the countries listed above are demographic and psychographics, cost of labor, cost of transportation and logistics, local tax, business incorporation fee and rent / leasing amongst other factors.

Over and above, when it comes to starting a medium scale grocery store, you should be prepared to either rent or lease a standard facility (warehouse facility); this is going to be one of the areas where you are expected to spend the bulk of start – up capital, other areas are the amount required to stock your store with varieties of products from different manufacturing brands both locally and internationally, the scale / size of the business and also in paying your employees at least for the first three months of starting the business.

How Much Does It Cost to Start a Grocery Store in the United States?

These are the key expenses you are expected to make when starting a medium scale but standard grocery store business in the United States of America;

  • The total fee for registering the business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the Grocery Store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
  • The cost for store remodeling (construction of racks and shelves) – $20,000.
  • Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (stocking with a wide range of groceries from different brands) – $100,000
  • The cost of purchasing storage hardware (bins, rack, shelves, food case) – $3,720
  • The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $10,000
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
  • The cost for building and hosting a website: $600
  • The cost for our opening party: $2,000
  • Miscellaneous: $5,000

Starting a small – scale but standard grocery store business in the United States of America will cost about seventy-five thousand dollars to two hundred and fifty dollars ($25,000 to $50,000). Please note that despite the fact that it is a small – scale grocery store does not mean that it is in same level with the average mom and pop grocery store in the United States.

You will need an estimate of three hundred thousand dollars ($300,000) to successfully set up a medium scale but standard grocery store in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 month of operation and it only applies to single grocery store.

When it comes to starting a standard and large-scale grocery store with several outlets in the United States of America, a company with the intention of selling franchise, then you should look towards budgeting well over one million dollars ($1 million).

How Much Does It Cost to Start a Grocery Store in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard grocery store business in the United Kingdom;

  • In the United Kingdom, Online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House’). There’s a same day service costing £100
  • Legal expenses for obtaining licenses and permits as well as accounting services (software, P.O.S machines and other software) – £700
  • Marketing promotion expenses for the grand opening of the Grocery Store in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – £2,400.
  • The cost for payment of rent for 12 month at £1.76 per square feet in the total amount of £25,600
  • The cost for store remodeling (construction of racks and shelves) – £5,000.
  • Other start-up expenses including stationery (£300) and phone and utility deposits (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000
  • The cost for start-up inventory (stocking with a wide range of groceries from different brands) – £70,000
  • The cost of purchasing storage hardware (bins, rack, shelves, food case) – £1,420
  • The cost for counter area equipment (counter top, sink, ice machine, etc.) – £4,500
  • The cost for store equipment (cash register, security, ventilation, signage) – £9,500
  • The cost of purchase and installation of CCTVs: £4,500
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): £2,500.
  • The cost for building and hosting a website: £600
  • The cost for opening party – £2,000
  • Miscellaneous: £5,000

Starting a small – scale but standard grocery store business in the United Kingdom will cost about Fifty thousand dollars to one-hundred-and-fifty-pound sterling (£15,000 to $40,000). Please note that despite the fact that it is a small – scale grocery store does not mean that it is in same level with the average mom and pop grocery store in the United Kingdom.

You will need an estimate of two hundred thousand dollars (£200,000) to successfully set up a medium scale but standard grocery store in the United Kingdom. Please note that this amount includes the salaries of all the staff for the first 3 month of operation and it only applies to single grocery store.

When it comes to starting a standard and large-scale grocery store with several outlets in the United Kingdom, a company with the intention of selling franchise, then you should look towards budgeting well over seven hundred and fifty-thousand-pound sterling (£500,000).

How Much Does It Cost to Start a Grocery Store in Canada?

These are the key expenses you are expected to make when starting a medium scale but standard grocery store business in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Centre ($250 if filed through other means)
  • Legal expenses for obtaining licenses and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the Grocery Store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
  • The cost for store remodeling (construction of racks and shelves) – $20,000.
  • Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (stocking with a wide range of groceries from different brands) – $100,000
  • The cost of purchasing storage hardware (bins, rack, shelves, food case) – $3,720
  • The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $10,000
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
  • The cost for building and hosting a website: $600
  • The cost for our opening party: $2,000
  • Miscellaneous: $5,000

Starting a small – scale but standard grocery store business in the Canada will cost about seventy-five thousand dollars to two hundred and fifty dollars (CAD$30,000 to CAD$60,000). Please note that despite the fact that it is a small – scale grocery store does not mean that it is in same level with the average mom and pop grocery store in the Canada.

You will need an estimate of three hundred thousand dollars (CAD$250,000) to successfully set up a medium scale but standard grocery store in Canada. Please note that this amount includes the salaries of all the staff for the first 3 month of operation and it only applies to single grocery store.

When it comes to starting a standard and large-scale grocery store with several outlets all across key cities in Canada, a company with the intention of selling franchise, then you should look towards budgeting well over one million dollars (CAD$1 million).

How Much Does It Cost to Start a Grocery Store in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard grocery store business in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years
  • Legal expenses for obtaining licenses and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the Grocery Store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
  • The cost for store remodeling (construction of racks and shelves) – $20,000.
  • Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (stocking with a wide range of groceries from different brands) – $100,000
  • The cost of purchasing storage hardware (bins, rack, shelves, food case) – $3,720
  • The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $10,000
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
  • The cost for building and hosting a website: $600
  • The cost for our opening party: $2,000
  • Miscellaneous: $5,000

Starting a small – scale but standard grocery store business in Australia will cost about seventy-five thousand dollars to two hundred and fifty dollars (AUD$75,000 to AUD$250,000). Please note that despite the fact that it is a small – scale grocery store does not mean that it is in same level with the average mom and pop grocery store in Australia.

You will need an estimate of three hundred thousand dollars (AUD$300,000) to successfully set up a medium scale but standard grocery store in Australia. Please note that this amount includes the salaries of all the staff for the first 3 month of operation and it only applies to single grocery store.

When it comes to starting a standard and large-scale grocery store with several outlets in key cities all across Australia, a company with the intention of selling franchise, then you should look towards budgeting well over one million dollars (AUD$1 million).

Estimating Start – Up Cost for a Grocery Store Business Was Based on the following factors;

  • Specific Location

The location you chose to start your grocery store is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consist of people with the require purchasing power.

If you make the mistake of renting or leasing a store facility for your grocery business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential customers.

Inventory

In starting a grocery store, you will need the following startup – inventory;

  • Supply of varieties of groceries from different brands
  • Book keeping and accounting and Goods / sale register (inventory)
  • List / catalog of available groceries in your store
  • Packaging materials / Shopping bags

Equipment

In starting a grocery store business, you will need the following equipment. These equipment are meant to be taken really seriously;

  • Computers and receipt issuing machines
  • Point of Sale Machines (POS Machines)
  • CCTV Cameras and Flat Screen TVs
  • Shopping carts

Staff/Manpower

When it comes to starting a standard grocery store business on a large scale, you would need the services of the following professionals. These professionals do their best to do the very best in their fields.

  • Chief Executive Officer (Owner)
  • Store Manager
  • Human Resources and Admin Manager
  • Merchandize Manager
  • Sales and Marketing Manager
  • Information Technologist
  • Accountants / Cashiers
  • Sales Attendants / Customer Services Executive
  • Cleaners
  • Security Guards

Can Grocery Store Be Bootstrapped on a Lean Budget Right from Home?

Grocery store business is one of many businesses that despite the fact that it can be started with a relatively learn budget, it can’t be operated from the home. This is so, because you would not want people to continue to knock at your door and invade your privacy just because you want to sell grocery to them. As a matter of fact, it is a security risk and you likely not going to get a clearance from the regulating department in your city.

Although in some countries, you can successfully launch a small – scale grocery store in your front yard. With that, you can indeed bootstrap your grocery store on a lean budget within your residential apartment. Just ensure that you consult the required authority in your city to be sure you secure a permit to run a business in a residential area.

How Much Does It Cost to Buy a Grocery Store Franchise?

In the United States of America, the Average Cost of Purchasing a Grocery Store Franchise is $80,000. Examples of 3 Well – Known Grocery Store Franchising Companies in the United States of America are;

  • Grocery Outlet
  • Ben & Jerry’s Franchising Inc.
  • Edible Arrangements

In the United Kingdom, the Average Cost of Purchasing Grocery Store Franchise is £35,000. Examples of 3 Well – Known Grocery Store Franchising Companies in the United Kingdom are;

  • Jasper’s Catering Franchise Ltd
  • Marston’s Pub Franchise
  • Veeno Franchising Ltd

In Canada, the Average Cost of Purchasing Grocery Store Franchise is $100,000 (Canadian Dollar). Examples of 3 Well – Known Grocery Store Franchising Companies in Canada are;

  • Chopped Leaf
  • M & M Food Market
  • Save – A – Lot Food Stores

In Australia, the Average Cost of Purchasing Grocery Store Franchise is AUD$200,000. Examples of 3 Well – Known Grocery Store Franchising Companies in Australia are;

  • IGA Stores
  • Spar Supermarket Mackay
  • Mitchell Supermarket