Starting a grocery store in Toronto may seem overwhelming at first, but it is, without doubt, a lucrative idea. Grocery Stores are known to sell food and other household items. Often called supermarkets, grocery stores are go-to sources for a home’s food needs. They similarly sell important kitchen utensils, disposable items, cleaning materials, alcohol, soft drinks, and self-care items.
Toronto is indeed a global city filled with vast opportunities and is home to an array of distinctive and dynamic neighborhoods that reflect the diversity of its population. This city is renowned for its vibrant art and entertainment scene, incredible cultural festivals, delicious food, thriving sports culture, excellent shopping, beautiful parks and beaches.
Have it in mind that Toronto is a wonderful place to live, work, and even start a business. Whether you prefer wine bars, microbreweries, live music venues, internationally-renowned restaurants, trendy markets, exotic food trucks, specialty boutiques, global and local grocery stores, cheering on the city’s professional sports teams with thousands of adoring fans, or a little bit of everything, Toronto has that unique platform to offer something great to you.
By starting and running a grocery store in Toronto, you position yourself in the heart of a thriving metropolis, with incredible opportunities available to you, regardless of the exact things you choose to sell. Toronto boasts an expansive local network of consultants, professional firms, and specialty suppliers.
The business services cluster is among North America’s largest and growing. Toronto is home to 9 of Canada’s 10 largest law practices, 9 of the top 10 accounting firms, and all 10 top human resources and benefits firms.
Estimated Cost of Starting 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 0 if filed online through Corporations Canada’s online Filing Centre (0 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).
Note that Toronto is indeed a true North American gateway, with well constructed highways, multi-modal railway facilities, a Great Lakes port, the nation’s ninth busiest airport located in the downtown core and Canada’s largest international airport move people and goods through the city and around the globe.
Numerous factors can determine the actual cost of starting a grocery store in Toronto. And though some of the factors may not apply to you, because the business management and interest may differ, but it will somehow influence your cost of starting your grocery store in Toronto.
Factors That Will Influence the Cost of Opening a Grocery Store in Toronto Canada
Table of Content
The Choice of Location
One major factor that will determine the cost of opening a grocery store in Toronto is the location. Municipalities like Toronto often place zoning restrictions on the location of certain types of business activity. Prior to leasing or purchasing a property, it is advisable to determine that a retail store is permitted on the property.
For inquiries about zoning, please visit the nearest Toronto Building Customer Service counter. Furthermore, new construction and alterations to buildings often require a building permit. Applications can be obtained through the City of Toronto.
The Required Licenses and Permits
You will definitely need a business license to operate a grocery store in Toronto. Municipal licensing requirements may differ outside the city of Toronto and it is advisable to contact the municipality where you are doing business. In Toronto, operating licenses are issued by the Municipal Licensing and Standards Division of the City of Toronto. If you tend to sell drugs, liquor, gas in your grocery store, then you will have to acquire provincial licenses.
Grocery Store Niche
Another major factor that will determine the overall cost of opening a grocery store in Toronto is the niche and product you intend to sell in your store. A grocery store or grocer’s shop is a retail shop that sells food, either fresh or preserved. Large grocery stores may carry significant amounts of non-food products, such as clothing and household items, blurring the line between grocery stores and supermarkets.
In addition, most people have gone digital, and there are chances that you might have to run an online grocery store along with the physical store. It would help if you considered planning a delivery module that will help in balancing your books.
Also, you should consider the number of employees, delivery routes, and travel reimbursements, so that you avoid wastage of resources. Consider generating some mapped routes that will help you track food delivery by your employees.
Size of the store
Also have it in mind that the size of your store is a major factor that will determine the overall cost of opening a grocery store business in Toronto. You can also decide to rent, lease or build your own store facility from the scratch.
Note that with renting and leasing, you may have to spend extra to redesign the store to fit into what you intend, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.
If you intend to construct from the ground, then you will have to acquire the land or a property, construct and equip the store facility to fit into what you have in mind. You will agree that you are going to spend way more when compared to people that rent or lease a store facility.
Business Structure and Registration
The structure you choose for your grocery store is another factor that will greatly influence the cost of starting your business in Toronto. Business registration with the Ministry of Government Services for sole proprietorship and general partnerships is $80 for a paper copy or $60 if completed on the computer terminal.
The registration is valid for five years and must be renewed before it expires. Business name searches can be conducted for a fee of $8 to $26 depending on the type of report. Registrations for sole proprietorship and general partnerships can also be completed at Enterprise Toronto.
The fee to register your business without a name search report is $114.81, and with a name search is $129.59. Registrations are completed between 9 a.m. and 4 p.m. Businesses wishing to incorporate provincially are expected to do so through the Ministry of Government and Consumer Services (Government of Ontario).
To register as a Provincial Incorporation, you will have to complete a NUANS name search to determine if the name is available. The NUANS report is omitted for businesses wishing to operate under a numbered company. Articles of Incorporation will have to be filed within 90 days of completing the name search.
The Articles of Incorporation can be filed at the Ministry of Government Services for a cost of $360. Enterprise Toronto offers provincial NUANS name searches for a fee of $74.98 and Articles of Incorporation filing services. Articles of Incorporation filing costs $448.43 (NUANS included in price).
The cost for paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a grocery store in Toronto. Beyond the legally required employment insurance, your grocery store will need additional protection.
There are a variety of policies covering property, general liability, business interruption, key people, and disability. Be sure you discuss these options with an insurance agent and lawyer to determine which ones suit your business.
Furnishing and Equipping the Grocery Store
Another crucial factor that will greatly influence the cost of opening a grocery store is the cost of furnishing and equipping the store. Note that aside from the basic facilities expected to be seen in a grocery store, store design is personal and the taste of the owner will greatly determine the cost of starting the business.
You will need items like; fridge, deep freezer, microwave oven, storage hardware (bins, rack, shelves, food case), shopping baskets and trolleys, counter area equipment (counter top, sink, ice machine, etc.), (Flat Screen TVs, sound system, Satellite dish and decoder, furniture (table, and stools), telephones, filing cabinets), store equipment (cash register, POS machines, security, CCTVS, ventilation, signage), and security and fire alarms amongst others. All these will cost money and it will influence the overall cost of opening a grocery store.
When starting a grocery store, hiring employees may be the furthest thing from your mind. But it’s amazing how quickly that time can come. You will have to plan ahead for everything you’ll need to set up to ensure you’re legally covered to hire employees in Toronto. If you have employees, you are required to comply with all employment regulations including the Employment Standards Act, the Occupational Health and Safety Act and the Pay Equity Act (for over then employees).
The cost for branding, promoting and marketing the grocery store is yet another key factor that will determine the overall cost of opening a grocery store in Toronto. Branding, promotion and marketing will help you compete with brands that are already determining the market direction in the industry in Toronto.
You should also plan your marketing strategy when you made your business plan, but now is the time to put it into action. Translating those plans into goals and specific marketing initiatives so you can get your business off to a great start will cost money and will influence the cost of starting a grocery store.
Another major factor that will influence the cost of opening a grocery store in Toronto is the source of your inventory. Note that some groceries specialize in the foods of a certain nationality or culture, such as Africans, Chinese, Italian, Middle-Eastern, or Polish.
These stores are known as ethnic markets and may also serve as gathering places for immigrants. If you source your inventories from outside the Canada, running the grocery store can be more expensive than others who can get their supplies within the country or province of Toronto.