Supermarkets enjoy some of the most stable revenue streams of all business types because, while various consumer tastes and trends fluctuate, the demand for groceries and basic household items is fairly constant. For this reason, starting a supermarket chain can prove to become a strong and lucrative investment for some time to come.
A Supermarket, according to the Oxford Advanced Learner’s dictionary is a store that sells food, drinks and goods used in the home. It is a one stop place to shop for your daily needs and deals with the retailing of provisions, food stuffs, home items and general needs of a particular locality, city or area. A Supermarket is a bigger kind of a Mini Mart or Grocery store, where varieties of products and goods are placed on display. A Supermarket usually displays for sale a wide range of products so that a customer could purchase nearly everything they need without having to visit several stores.
A Supermarket is a very lucrative business with a high profit returns on investment. Though capital intensive, if well located, a large customer patronage is envisaged and this should translate to high sales and profit margins. The success of a Supermarket depends on stocking it with varieties of products to suit the varying needs of consumers. David Thompson, a marketing consultant with PMCG, noted that supermarkets have high patronage due to quality, discount, variety, convenience and customer service.
1.Decide on the business type: Model here means your particular product offering. For example there are four model types: Supermarket as standalone- which comprises general food items and provisions only, supermarket and cosmetic-this model combines running a supermarket alongside a cosmetic section , supermarket and pharmacy-this combines a supermarket with a pharmacy, supermarket and gift store-providing a supermarket and offering gifts items for sale.
2. Develop a business plan: You need to have a guide in this business. The business plan document does this for you. Whether your business plan is formal or informal , on paper or digital, the process of creating a business plan is crucial to the growth and success of the business. It will give your supermarket a vision and blueprint to work with.
3.Decide on an appropriate business location: The supermarket business is location sensitive. Success or failure depends on where you situate your supermarket. Most supermarkets are situated at major commercial centers or middle class/ high income neighborhoods where they can attract huge flow of customers. Situating a supermarket near a school for example may spell doom for the business.
4.Define your target market: What type of customers will you be targeting i.e. are they low income, middle income or high income? Determining the kind of customers you will cater for can help to moderate your start- up capital as well as the costs for buying products that you may eventually have no need of.
5.Discover wholesale product markets: The supermarket business is about buying in wholesale to enjoy the benefit of lower prices. The process involves buying directly from producers, major distributors, sub-distributors or wholesale markets. Always make sure you locate producers that sell with the lowest prices possible.
6.Proper inventory: A standard supermarket must have a list of inventory, engage in regular stock taking e.t.c to make for an effective system of internal controls. A prospective owner should consider undergoing training in book keeping and Accounting as pilfering is a major challenge of this line of business. As the business grows soft ware programs that enhances controls should be developed. Also to be considered at this point is the engagement of a security personnel.
7.Good merchandising : Products should be so arranged, labeled with directions available to make for easy location of what customers need. Items like display shelves, counters, air-conditioners/fans, refrigerators/deep freezers, lighting, money safe, price tags, shopping baskets/trolleys, counting machine, electronic till and a stand-by generator to give customers a good shopping experience.
How to boost sales in supermarket business
Getting credit facility from producers
Supermarkets enjoy credit facilities from producers and suppliers. Those who qualify for are usually the ones who have consistently patronized that supplier over time and have built on credibility and trust New supermarket owners are therefore advised to make trustworthiness and integrity their watch words when starting out. Always try to meet volume target sales. Supermarket owners and customers can also enjoy numerous discount offers and promotions at different times especially during festive occasions when sales are high.
Without sales your business cannot grow or make profit. How do you boost sales? According to a supermarket owner Godwin Mansaray you must at all times put your customers first by having a strong customer relationship. Always be willing to go the extra mile to satisfy your customers after all there are other places he can patronize.
Your supermarket must have a very good ambience if you want to retain your customers. It must be conducive for shopping, well ventilated with soothing music at the background. Well trained and courteous ushers/staff must be on hand to receive and guide the customers
Your supermarket must be known to stock and sell quality products. Foods must always be fresh and not expired. Maintaining quality standards at all times will guarantee patronage and loyalty from customers. No one likes to buy substandard or expired goods.
Quick restocking of items
Always ensure to restock or replace items that are out of stock. Customers can easily switch to your competitors if you are always in the habit to of running out of major product items. Discount pricing
Customers patronize supermarkets that have lower pricing than their competitors. Once your customers identify that your prices are higher than what is obtainable elsewhere they move. To avoid this always try and get discounts from your suppliers and transfer part to your customers.
Increase stock of high demand products
Increasing sales from a supermarket business depends largely on the ability of the owner to understand the needs of the people in the business environment by always stocking items they request. You can know this by having a data base of every item in your supermarket and monitor their respective daily sales through computer software like excel. This will ensure that you keep track on your products, sales volume and overall profit.
Always keep an eye on reducing overhead costs. Most supermarkets and departmental stores have closed down due to this. Watch your expenses and do not employ more staff that the business requires. During peak periods you can employ on contract or part-time basis. Also discourage giving out credit except to trustworthy customers with a good credibility status. Loyal customers should be rewarded at the end of the year.
Managing a supermarket takes dedication, patience and innovativeness. If they are managed well they can last for decades and if not your guess is as good as mine!
John F Fowler is a business consultant, entrepreneur and youth entrepreneurship development trainer. He has produced books on various SME business start-ups . For business advice contact him on email@example.com , www.startabusiness.com.ng, whatsapp +234 802 325 4577.
Monday April 03, 2017