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How to set up a grocery

Keep a close eye and a steady hand on operations and supplies to make it work.
By Bernadette Reyes |

Having the goods and enough space does not guarantee the success of a grocery business. Keep a close eye and a steady hand on operations and supplies to make it work.

 

Filipinos spend a big chunk of their money on food. According to the 2006 Family Income and Expenditure Survey conducted by the National Statistics Office, 41.4 percent of household earnings was devoted to food, while 3.7 percent goes to personal care and effects. Alcoholic beverage and tobacco products account for 0.7 and 0.9 percent, respectively.

 

These figures alone say a lot about the prospects of a neighborhood grocery or a supermarket. A grocery sells food and non- food items, and it has a bigger inventory than a sari-sari store. It’s like a supermarket, but it needs a smaller area, less staff and fewer check-out counters.

 

You may not have the capital to open a full-scale supermarket, but you can definitely save up or get a bank loan to finance a modest grocery. Here’s how to go about it:

 

FUNDING. You would need at least P150,000 as working capital to stack up on initial inventory. Another P150,000 may be required to cover the top three operations-related expenses: rent, salary of personnel, and fees for utilities.

 

Don’t expect gains within a year; it usually takes “two to five years” to recover your investment in a grocery, according to Steven Cua, president of Philippine Amalgamated Supermarket Association (PAGASA).

 

LOCATION. Do you plan to open a grocery near a school, a hospital or an office? Find out the demographics of the people in your desired area, and then decide what items your store should carry. Welcome Supermart in Quezon City, for example, is located near a hospital, so it offers infant formula milk and water, which are usually needed by patients and other people who go in and out of the hospital.

 

The countryside can also be a good location for a neighborhood grocery, especially in the absence of a full-line supermarket, says Robert Go, owner of Prince Warehouse Club. His business, which began as a neighborhood grocery in Cebu, is now a wholesaler with multiple branches in Cebu and Leyte.

 

Go says you should also know the following about your market: average grocery expense per household, their livelihood and sources of income, and their shopping habits.

 

STAFFING. You need at least 10 to 20 people to operate your grocery smoothly.

■ Cashiers: They man the check-out counters. If you have three counters, hire more than three cashiers, ensuring smooth operations even when an assigned cashier is unable to go to work.

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■ Store manager or supervisor: He assists the owner in store operations. When you have more than one branch, you can hire a supervisor to oversee the operations of those other branches, plus a store manager to coordinate with other stores and share Operating Hours some of the owner’s responsibilities.


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