grocery business plan in nigeria

How to Start a Successful Supermarket or Convenience Store in Nigeria

• by SME Guide

Running a successful supermarket or convenience store in Nigeria can be a profitable venture if done right. The rapidly growing population, coupled with increased consumer spending, presents immense opportunities for retailers. However, you need proper planning and strategic execution to thrive in this highly competitive sector. This comprehensive guide covers all the key things you need to know to start your retail business in Nigeria.

Conducting market research

Before committing resources to start a supermarket or shop, it’s crucial to carry out thorough market research. This will help you make informed decisions and set up a store primed for success. Here are key things to analyse. Read our Beginner’s Guide to Conducting Market Research .

Customer Demographics Understand your target customers, i.e., their age, income levels, shopping habits, preferences, etc. This will guide decisions around store location, product assortment, pricing, etc. Focus both on existing and emerging customer segments.

Competition Analysis Study existing supermarkets and stores in surrounding areas. Look at factors like their product ranges, pricing, store size, marketing strategies, etc. This will help you identify gaps to fill and avoid copying their model outright. Track sales trends to estimate the market size.

Supplier Landscape Research food and grocery suppliers and distributors in Nigeria. Evaluate factors like their pricing, minimum order quantities, delivery reliability, etc. Having reliable suppliers is key to maintaining inventory levels. Prefer suppliers that offer exclusivity arrangements to differentiate.

Understand Regulations Research all the legal and tax regulations surrounding owning retail stores in Nigeria. Factors like business permitting, shop registration, and food handling compliance are critical. Being compliant helps avoid penalties and abrupt shutdowns.

Having insights from thorough market research sets the right foundation to craft an effective business strategy. The next step is developing a sound business plan.

Creating a bankable business plan

A detailed supermarket business plan is indispensable, especially when seeking external funding from banks or investors. Key things to cover:

Executive Summary Briefly summarise key details like ownership structure, target market, value proposition, store location, products and services, projected financials, etc. This overview section captures the essence of your overall plan.

Company Profile Provide background details like ownership structure, organisational values, the capabilities of key team members, etc. Elaborate on your competitive advantages concerning factors like expertise, proprietary processes, technology, etc.

Products and services Describe in detail the product categories and services offered based on insights from your market research. Project your product assortment and inventory levels for the next 1-3 years. Explain sourcing plans, i.e., key supplier relationships and distribution strategies.

Market Analysis Leverage research insights to describe target customer demographics and psychographics. Analyse the competitive landscape. Highlight how you will differentiate your store and gain market share. Share sales and growth projections.

Marketing and sales strategy Detail plans for areas like store branding, promotions, partnerships, loyalty programmes, social media, etc. to attract and retain customers. Have measurable goals and key performance metrics to track success.

Operations Plan: elaborate on day-to-day store operations like inventory management, storage, developing standard processes and staff training models, etc. Cover areas like equipment, tech systems, and tools required. Highlight plans for ensuring regulatory compliance.

Management Team Profiles and accomplishments of key team members, especially in retail. Advise having an advisory board with veterans from the industry.

Financial Plan: detailed projections of expected sales, revenues, operating costs, capital expenditures, etc. Have profit/loss, balance sheet, and cash flow statements covering at least 3 years. Include assumptions behind estimates and break-even scenarios.

Having a solid plan builds credibility and greatly aids in securing financing from banks or external investors. The next crucial step is identifying the right location.

Selecting an Ideal Retail Location

Choosing a strategic location best suited for your target demographic is vital for any retail business. Here are key factors to evaluate:

Customer Access Easy accessibility for customers is paramount. Check for proximity to highways, side roads, bus stations, fuel stations, etc. Consider proximity to residential areas, schools, hospitals, and corporate campuses, which drive foot traffic.

Visibility and Storefront The store should be highly visible from the main road, with adequate signage and outdoor space for parking. The storefront should stand out to draw attention. Being near landmarks also helps.

Competition Unless you have sufficient capital for aggressive promotions, avoid locations with multiple established competitors nearby.

Infrastructure: Verify essential infrastructure like roads, electricity, water supply, etc. needed for smooth operations. Avoid areas with frequent shortages that can hamper business.

Security: Ensure the location has adequate safety precautions and security personnel to safeguard inventory from theft, which is a key loss in retail.

Commercial Zoning Laws: Confirm that land acquisition and construction adhere to commercial zoning laws for retail establishments in that locality to avoid future challenges.

Growth Potential Consider the scope for future expansion when scouting locations—adjacent empty plots, upcoming residential or commercial projects, etc. This helps plan for long-term growth.

While identifying a suitable location, negotiate lease or purchase rates that provide maximum value. With thorough planning, retailer owners can secure prime locations best positioned for profitability.

Estimating startup costs

Starting and running any retail business entails a sizeable capital outlay, especially in the initial years before achieving profit milestones. Key heads to budget for include:

Property Purchase or Rent Acquiring commercial real estate, securing permits, renovations, etc., especially in cities, entails major upfront payments. Even long-term rents need sizeable advance deposits.

Store Design and Interiors Shop layout design, shelving, checkouts, shopping baskets and carts, in-store branding, etc. can cost a significant sum. Owners must align store aesthetics with positioning.

Equipment Specialised refrigeration systems, power backup, CCTV security, etc. all represent major fixed asset investments to enable smooth store operations.

Inventory Sufficient initial working capital needs allocation for sourcing and stocking inventory before store launch. Inventory levels must align with sales projections.

Technology POS hardware and software, accounting systems, inventory management technology, etc. aid in tight retail operations control and cash flow planning.

Manpower Staffing all functions with qualified personnel (store manager, cashiers, stockists, etc.) entails monthly operating expenses.

Marketing Promotions, ads, and other below-the-line engagement initiatives to attract customers account for a notable share of sales budgets.

Working Capital Every retail venture requires surplus working capital for contingencies like consumer demand fluctuations, overstocking of seasonal goods, etc.

Adequately sizing budgets across all the above heads based on market dynamics helps retailers deploy funds judiciously. Having flexibility by tapping external capital sources helps overcome constraints.

Arranging Financing

For any target store footprint and location, having reliable sources of financing ensures a timely launch and smooth operations. Here are viable options:

Savings and personal equity Dipping into personal savings and stocks is the top financing means for most first-time retail entrepreneurs. Adds credibility when raising external funds.

Bank Loans Banks do offer small business loans, including SME retail loans, backed by property or fixed deposits. Prepare a strong application and business case.

Angel and VC investors Those with an innovative retail concept can attract funding from individual and institutional investors wanting a good ROI. Offer to share in profits.

Crowdfunding Raising small seed capital to get started via crowdfunding platforms in Nigeria is gaining traction. It helps get validation before seeking larger amounts.

Partners and co-owners Onboarding business partners and co-owners to pool capital reduces the individual share of risks and burdens. Adds more accountability.

Grants and government programmes Federal and state initiatives to boost entrepreneurship and MSMEs in Nigeria offer some concessional financing support.

As much as possible, limit acquiring debt or giving up equity during the initial lean phase of retail operations. Focus more once the growth momentum sets in. Meanwhile, register for the required formal business permits.

Registering the business

Before a retail store launches, promoters must fulfil all statutory requirements, including:

Business Name Registration Register your unique supermarket or store name with the CAC to kickstart formal business incorporation.

Tax Identification Number Apply for your TIN, which aids tax reporting and compliance with FIRS guidelines. This also enables opening a corporate bank account.

Operating Licences and Permits Secure all state and municipal government-mandated permits related to running retail grocery businesses. Different towns have specific requirements.

NAFDAC Licences If selling perishables, meats, baked goods, etc., acquire National Agency for Food Drug and Administration Control (NAFDAC) licences stipulating food handling guidelines compliance.

Insurance Having ample stock, property, fire, and burglary coverage gives a financial cushion against unforeseen incidents causing inventory or premise damage.

Staff recruitment and training Develop a clear duty charter and the qualifications needed for hiring store managers, sales associates, stocking clerks, etc. Invest in requisite job skills training covering customer service, safety, cash handling, etc., even for entry-level roles.

Completing all legal formalities and documentation as per norms reduces business disruption risks and builds standing among customers and partners.

Choosing Product Mix and Suppliers

The choice of categories, product assortment depth, and supplier partnerships impact the success and differentiation of any retail venture. Here are key considerations:

Category Scope Along with staples like food grains, packaged foods, etc., consider extending into non-foods, apparel, electronics, etc. Combination stores attract more customer segments.

Private Labels Branded products build authority. Consider developing some private labels over time after gaining stability with sales of known national brands customers relate to.

Assortment Depth Within each category, refine target stock-keeping units tailored to community preferences and local tastes. Avoid generics and focus on stocking enough branded variants catering to diverse needs.

Supply Partners Partner with manufacturers and traders able to meet high-volume needs with reliable delivery schedules for consistent inventory. Have contracts stipulating quality standards and continuity.

Direct Sourcing Explore possibilities to directly source certain products, like fresh produce, dairy, etc., where feasible. It helps improve margins and control over quality.

Exclusive Variants Enter into arrangements with brands that provide specially packed sizes or co-branded products exclusively for your stores. This tactic prevents direct price comparisons.

Private Labels Over time, introduce smartly positioned private label items matching or exceeding brand attributes at 5–15% lower price points. Ups margins.

Making prudent choices to curate a tailored merchandise mix that fulfils specific customer expectations boosts store pulls and thereby revenue and profitability.

Managing Inventories

Maintaining optimal inventory volumes, efficiently replenishing stocks, and minimising losses due to damage, expiration, etc. are crucial for supermarkets to ensure profitability. Here are effective tactics:

Accurate demand forecasting Leverage historical store-level sales data, trends, seasonality, events, discounts, etc. for scientific demand planning and inventory budgeting.

Lead time reduction Through supplier negotiations and logistics improvements, stretch targets to reduce average lead times by 7–15%. Better still, partner with local vendors.

Shelf Space Planning Align shelf layouts and assign display space sizes per SKU based on historical item velocities and anticipated demand. Prevent stockouts.

First in, first out. Rigorously follow FIFO stock rotation to avoid write-offs from product expiry. Integrate batch/expiration tracking into the inventory system.

Safety Stock Based on the sales variance analysis of each product, define minimum buffer quantities to always be available to meet spikes in demand.

Technology Usage Leverage retail tech like IoT, RFID, blockchain, etc. for inventory tracking, placing automated replenishment orders, and enabling precise demand-supply matching.

Vendor Managed Inventory: Explore having trusted suppliers directly manage and replenish inventory of certain categories at your locations based on pre-agreed service levels.

Through relentless efforts towards improving forecast capability, supply chain efficiencies, and inventory control systems, substantial working capital gets freed up, boosting overall business profitability.

Selecting technology systems

Adopting the latest retail technology systems and tools optimises in-store operations, enhances customer engagement initiatives, and provides sales and profitability analysis inputs.

POS Solutions Install modern point-of-sale software with touchscreen terminals offering bill print customisation options and GST/VAT handling. Should integrate payment gateways.

Planograms Leverage planogram software to ensure optimal product adjacencies and shelf space allocation based on customer intuition and sales trends.

CRM Software To manage loyalty programmes, have a CRM solution with features like membership management, personalised engagement, tiered rewards tracking, etc.

Surveillance Systems CCTV cameras feeding into digital recorders with at least 90 days of storage help monitor checkout areas, entry/exit, some aisles, etc. Deters theft.

Inventory Management Use feature-rich software to aid in purchase planning, identifying fast or slow sellers, tracking batch expiry, simplifying price updates, etc. for control.

Customer Analytics Gain actionable insights from analytics on customer demographics, purchase habits, responses to promotions, etc. to craft customer-centric marketing.

Accounting Software Manage complex billing, vendor payments, taxation, etc. efficiently by implementing capable accounting software systems with inventory interlinking.

Deploying the right complementary technology infrastructure provides comprehensive system support, enabling smooth store operations, tighter control, and deeper customer engagement to drive sales.

Hiring store staff

Hiring qualified professionals and equipping them with adequate job skills training is imperative for the successful launch and running of any retail store.

Store Manager Hire those with prior brick-and-mortar management exposure and the requisite technical knowledge and leadership traits to provide oversight across store operations and back-end functions.

Department Leads Assign leads to oversee and take ownership of specific sections like perishables, non-foods, etc. based on individual competence. Helps manage large format stores.

Customer Associates Hire those with flair for customer service and expertise regarding products to offer purchasing assistance and appropriate cross-selling prompts at checkout.

Cashiers Prefer those with prior billing experience and a numerical aptitude for managing transactions efficiently through batches, discounts, returns, etc.

Security Guards Onboard personnel from reputed third-party security agencies to man entrance and exit points. Deters shoplifting, which causes major losses.

Housekeeping Staff Dedicated floor cleaning staff ensures maintaining high standards of visual merchandising and hygiene reassurance needed in retail food establishments.

Invest adequately in periodic training needs assessment and rolling out relevant skill improvement programmes to further augment staff capabilities. Incentivize achievements.

Marketing and Promotions

In a competitive retail landscape, supermarkets must actively employ select marketing techniques for brand building while relying on targeted promotions to attract and retain customers.

Brand Positioning Define and consistently project a clear brand image around parameters like value for money, product quality, store experience, etc. aligned with target consumers.

Signage and Storefront Invest in visually appealing large exterior signage matched with well-designed landscaping and lighting to make a striking first impression conveying brand ethos.

Advertising Plug into multiple advertising channels (local print, radio, digital, etc.) based on the consumption patterns of catchment communities to maximise media plan ROI.

Direct Mailers Send postcards, brochures, etc. with upcoming deals and offers to homes in nearby high-value neighbourhoods to drive store visits.

Loyalty Programmes Offer tiered benefits like additional savings, exclusive deals, bonus rewards, etc. for members to gain wallet share and boost retention.

Promotions and deals Run for a limited period. buy 1 get 2 free offers, bundled pricing, additional saver cards, etc. matched to buying behaviour covering popular or newly launched products for extra pull.

Omnichannel Presence Have an aesthetically designed website with an online product catalogue and seamless in-store pick-up facilities, along with active social media engagement for better reach and recall.

CSR Initiatives Undertake community connect drives (cleanliness, tree planting, recycling, etc.) to position the store as a socially responsible neighbourhood with brand-boosting affinity.

Sustained brand building supported by tactically timed promotions targeted at customer preferences gives an edge in detracting buyers from competing stores or online channels.

Earning customer loyalty

Supermarkets can focus on select strategies to improve the customer experience, exceed expectations, and earn long-term loyalty.

Friendly Service Train staff to be polite, attentive, and go the extra mile in servicing customers speedily during billing, handling disputes, etc.

Product Sampling Offer select new products for free trials, like juice, biscuits, spreads, etc., for prospects to assess quality and consider buying them eventually.

Value-Added Services Provide amenities like parcel checking, gift wrapping, loyalty card issuance, etc. free of charge to delight patrons.

Convenience Focus Assure a wider product range, accept varied payment modes, extend working hours, etc. to enhance ease and generate goodwill through heightened convenience.

Personalisation Address regular patrons by name. Track individual preferences to give custom prompts like switching brands, trying new flavours, etc. during visits.

Cleanliness and hygiene Ensure the highest cleanliness around the store premises, including shelves, carts, etc. Maintain stringent hygiene levels in places like the produce section.

Feedback Management Actively seek periodic customer input through email surveys. Track and quickly resolve complaints escalated through feedback registers or helpline numbers.

Special Customer Events Arrange activations like food sampling stalls, celebrity visits, new product launches, etc. for regular buyers. Consider loyalty members exclusive preview events.

Energy Efficiency Maximise the usage of natural light during the daytime through skylights and windows, and install sensors and timers for lights and ACs to conserve electricity and lower the carbon footprint.

Renewable Energy Utilise solar heating for running kitchens and water heaters. Also, evaluate the feasibility of installing rooftop solar panels to meet a portion of daily energy needs through a clean photovoltaic route.

Waste Management Implement responsible solid waste disposal and food waste composting, adhering to pollution control guidelines. Enable plastic packaging returns for recycling partners.

Local Sourcing Enhance direct sourcing of multiple produce categories, like fruits, vegetables, dairy, etc., from neighbourhood farmers and vendors to aid community-based livelihoods and boost the local economy.

Food Safety Stringently follow vendor hygiene norms, cold storage protocols, shelf life adherence, etc. around dairy, meat, and ready-to-eat categories to prevent health hazards and safety incidents.

Expansion Plans

Scaling up the number of stores in strategic locations is imperative for sustained growth and reaping economies of scale for supermarkets.

Cluster Approach Expand within the same neighbourhood or adjoining localities for operational ease through shared infrastructure like warehousing, distribution, etc. to optimise logistics.

Hub and Spoke Utilise stores in Tier 1 cities as hubs for expanding within that city or into adjoining towns through smaller-format spoke stores at key residential catchments.

Tier 2/3 Cities Identify evolving cities driven by new educational institutes or industries where modern retail penetration is still low. Local insights help assess income growth feasibility.

Owned vs. Franchise Balance: company-owned large format stores focused on building brand equity along with smaller franchise variants for deeper distribution reach in hitherto untapped geographies.

Shop-In-Shop As a low-risk testing approach, consider setting up supermarket shop-in-shop sections inside existing department stores to evaluate potential before full store commitments.

Airport Retail Explore opportunities to launch convenience store formats at key airports to target high-displacement-income captive audiences like frequent business travellers open to trial.

Succession Planning

Putting long-term leadership succession plans in place is imperative before embarking on rapid, ambitious store network growth.

Purpose and Vision Clearly articulate and document the organisation’s purpose, vision, and priority focus areas for the next decade to sustain core ideology across leadership changes.

Leadership Competencies Define the essential behaviours and competencies expected in the CEO and top management roles based on strategic priorities and the culture being fostered.

Advisory Board Have an independent board of veterans and specialists like management consultants, technologists, academicians, etc. to advise existing and incoming leadership teams during transformations.

Structured Onboarding Institutionalise a rigorous onboarding process to enable newly elevated internal employees or external hires to transition seamlessly into leadership roles.

Review and feedback Conduct periodic reviews, seek input from key stakeholders within and outside the organisation and guide the progress of prospective next-generation leaders through timely constructive feedback.

Getting succession planning right boosts sustainability, allowing businesses to thrive for decades by smoothly passing batons to able, future-ready leaders.

Crisis Management

Despite best efforts, unforeseen events like pandemics, natural calamities, social unrest, etc. can unfavourably impact supermarket operations and continuity. Key measures to regain stability include:

Business Continuity Build contingencies around key infrastructure like cold storage, inventory, distribution, etc. operated redundantly from separate locations through partnerships, ensuring uninterrupted functioning.

Communications Have a crisis management taskforce for centralised decision-making with planned external messaging providing guidance to employees, vendors, authorities, etc. for coherence and avoiding panic.

Digital Focus Swiftly scale up existing e-commerce enablement or launch online ordering with deliveries including essential products during forced offline store closures to retain sales.

Care Initiatives Undertake community supportive services like home deliveries for seniors, distributing sanitation kits or protective gear, tie-ups with shelters, etc. during health emergencies or calamities to provide relief.

Exiting the business

After decades of operations, supermarket promoters may consider unwinding business through strategies like:

Franchising Convert majority-owned large stores into well-run franchisee outlets for risk mitigation while retaining a few flagship establishments to continue brand building.

MBO Arrangements Craft management buyout structures allow key personnel like the CEO, functional heads, etc. to take over operations with external funding support. Help retain culture.

Private Equity Route Explore private equity investors with an appetite for the retail sector to sell majority stakes so current owners can liquidate holdings while maintaining minority interests.

Orderly Shutdown In the worst-case scenario, look to dispose of key assets, settle liabilities, and gradually terminate store leases, closing entire operations in an ethical manner.

Carefully evaluating timing and structuring ownership transitions appropriately ensures retail founders can bank sizable returns and protect organisational legacy while securing the interests of wider stakeholders.

In Conclusion Starting and succeeding across a supermarket chain encompasses strategizing and flawless execution skills across complex domains of real estate, supply chain, technology, marketing, finance, and, more significantly, managing human resources. However, retail also provides immense job creation and community upliftment dividends when done right. This comprehensive playbook offered detailed guidelines across the retail lifecycle, from ideation and startup right through growth journeys to eventual business transitions. Meticulously following the outlined market expansion and profit-enhancing tactics paves the path for sustainable success even within Nigeria’s intensely competitive supermarket industry. The strategic principles and operational best practices form a solid foundation. However, beyond having the willpower, the differentiating variable is the passion and purpose founders bring to uplifting lives through their enterprise. That enduring commitment becomes the guiding compass, converting ambitious dreams into transformative realities as retail leaders in community development.

Related posts:

• The Rise of Modern Supermarkets in Nigeria: Changing Grocery Shopping Trends

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Supermarket business plan in Nigeria Industry Overview:

Table of Contents

This is a Complete Guide to Setting Up a Supermarket in Nigeria:

A supermarket business is one of the most lucrative businesses in Nigeria an enthusiastic entrepreneur can venture into.

Most businesses in Nigeria require skills in market penetration but with this business the manufacturing companies have already done all the necessary marketing and exposure you’ll need, all that is needed is to find a suitable location.

When setting up a supermarket business in Nigeria you need to be confident about the product you are purchasing and its supply, you must be sure that the product is in high demand. You need to consider branded goods from well reputable companies like Coca Cola, Unilever, Nike etc. In fact, if someone knows your supermarket he/she will even speak highly of you based on his experience buying quality products through your store or your websites.

If you want to get more customers then for your supermarket business in Nigeria then you need to focus more on volume meaning you need to sell lots of stuff fast by reducing profit margin while increasing exposure sufficient enough so people buy everything quickly.

When you have loyal customers they will always come back to you for more and more in the future.

It’s a good idea when you start selling to also create an online presence example: listing all your products on Jumia, Konga, Jiji, Facebook marketplace, Instagram etc. Or you can have your own website to increase the visibility and exposure of your supermarket business in Nigeria and remember, don’t try to be greedy because if you overprice your product people will not buy.

Make sure you have a good price for your products. If it’s a quality product and you have a friendly price then your sales will be good. Price is a core factor in the supermarket business in Nigeria cause it creates trust, It’s not just your customers that will trust you, but also your suppliers too. If they see that you are trustworthy they will want to sell more goods to you. Remember, people like doing business with honest people because they know what they are going to get in return. You must be honest with suppliers because if not, then there is no point working with them at all so keep it fair and square.

Nigeria is a country with many grocery stores. Some are small and some are big.

Most Supermarkets in Nigeria deals in a variety of food supply, which can be raw or processed. We also have other supermarket niches such as clothing, electronics, and shoes.

The supermarket industry has been around for decades but has changed over time to meet the needs of residents. Supermarkets can be very expensive to set up due to the various equipment involved.

The company that owns the supermarket must also pay for things like electricity and water which can make it hard to keep the store running if they don’t get enough customers coming through the door every day.

Cost of Starting a Supermarket in Nigeria (Business Plan in Nigeria)

In our supermarket business plan, we examine the cost of opening a supermarket in Nigeria and what it entails.

Nigerian supermarkets are very expensive to open due to the high cost of rent, ongoing maintenance, and other factors. The average cost to open a supermarket in Nigeria can range from 1 million to as high as 20 million naira.

The main costs that must be taken into account when estimating the cost of opening a supermarket in Nigeria are land acquisition and construction costs etc. The actual cost required to build new stores will depend on many factors including size whether they should be spacious or whether they can fit at one end of the building with some type of storage area. In order for this total investment to justify itself, you need not only have an excellent design but also adequate infrastructure such as shelves, driveways etc. There’s needs no doubt that building three more buildings would add another multi-million naira worth of retail revenues each year even considering how much demand there is right now for grocery products in Nigeria (in terms of both consumer and government spending). With regard to logistics development alone grocery sales companies make Millions annually especially when they are around the luxurious residential area, like an estate.

Types of Products to sell in Supermarket In Nigeria

Here is a list of the top products for a supermarket business in Nigeria. The products are ranked according to the most popular and profitable.

• Foodstuff (which can range from packaged consumables to raw food)
• Tools (small and medium-sized equipment for all kinds of work)
• Skincare products
• Medications
• Deodorant, perfume or body spray
• Pesticides and insecticide
• Interior design materials or fittings
• Clothes and clothing accessories (like bags, shoes, belts etc)
• Jewellery (wrists watch, rings etc)
• Mobile phones and accessories
• Computer and computer equipment

In most foreign countries supermarkets do sell a variety of goods and also offer some services but In Nigeria, we tend to niche down to a particular aspect in this industry, while doing your market research make sure you find out what sells best in that location, some locations can be food orientated while others might be clothing.

Does The Nigerian Government Offer Tax Deductions on Start-up Costs for Supermarkets?

The Nigerian government offers tax deductions on start-up costs for supermarkets. The Nigerian government has been trying to make Nigeria a more business-friendly economy by introducing tax deductions for start-ups. The deduction is available irrespective of the type of business and the amount invested in it. As a result, many entrepreneurs have started new successful businesses, which in turn has created jobs and increased economic activities in the country.

What Kind of Supermarket Business Plan in Nigeria Market Research Should you Conduct When Setting Up Your Own Supermarket Business In Nigeria?

In this section, we will discuss the importance of market research in your Supermarket business plan in Nigeria while setting up your own supermarket business in Nigeria.

Market research is a process of understanding the market and consumers.

It is important because it helps you to know what products people want and how they want them to be packaged. It also helps you to know how much people are willing to pay for these products. Market research can also help you understand consumer behaviour, which can be very helpful when deciding where to place your supermarket.

What kinds/products do Nigerian customers buy?

Above we talked about different products to stock your grocery business in Nigeria with.

But generally, there are four main types of products grocery stores in Nigeria purchase, they include

• Ready-to-eat food (shopping),
• Provision (Milo, Milk, Omo)
• Ice packs & energy drinks etc.
• Equipment (Toys, Brooms, Mop etc).

How to Market Your Supermarket Business in Nigeria Successfully

Marketing is a necessary part of any business. For supermarkets, the market is a little different. They have to not only advertise their products but also the grocery shopping experience.

Supermarkets have to make sure that they are providing an experience that is worth it for the customers. They need to offer quality food, affordable prices and convenience in order to attract more customers and keep them coming back.

A supermarket in Nigeria’s marketing strategy should focus on these two things:

• What they want their customer base to be,
• The Experience they want their customers to have when they step into the store.
• Feeling they will have once they leave the store

If people are buying products from you then there must be a reason for that. Be sure to do proper research on what other companies are doing in your marketplace so that you can learn how to do things better than them. You should also study how they advertise their business too because most of them won’t tell you how they do things so it is up to you to find out how they do it. If you study your competitor’s business then you can learn from them and make your business better than theirs! I have learned a lot about my competitors by simply watching what they are doing and learning from them. By doing this I have been able to improve my business skills a lot to do it better than them.

Also, you need to know how much your competitors are charging for their products and if possible then try to find out how much their advertising costs too. If you are not sure of what it costs to advertise then ask other people who have done this before. Some people don’t want to share this information with you but if they won’t tell you then just ask someone else.

Table of content of Your Supermarket business plan in Nigeria:

Business structure and systems are built upon basic and organized and planned business.

In the supermarket business to counter competition, hostile external economic factors and customer needs, a successful venture should have laid down goals and objectives which lead them towards an effective, efficient and profitable route in a long run.

The importance of getting a supermarket business plan or for any type of business cannot be overemphasized.

Before you start to get a business plan from us you need to have a better understanding of the actual cost for the type of supermarket you’re about to start.

This is what your Supermarket business plan in Nigeria should contain:

• Executive Summary
• Description of Problem and Solution 2.1 Vision 2.2 Mission 2.3 Value Proposition 2.4 Business Objectives 2.5 Critical Success Factor 2.6 Current Status of Business 2.7 Legal Requirement 2.8 Contribution to Local and National Economy 2.9 Contribution to SDG
• SWOT Analysis
• Market Analysis
• Competitive Analysis & Risk Analysis
• Marketing Plan 6.1 Description of Product (S) or Service (S) 6.2  Potential challenges in the business industry 6.3 The Opportunity 6.4 Target Market 6.5 Marketing and Sale Strategy
• Production Plan/Operational Plan 7.1 Description of the Location/Factory 7.2 Raw Materials/consumables 7.3 Production Equipment/Capital Expenses 7.4 Equipment/Depreciation Table 7.5 Pricing strategy 7.6 Record/Stock Control Process 7.7 Pre-operating Activities and Expenses

8.0 Organization Structure and Responsibilities

8.1 Salary Schedule

9.0 Financial Plan

9.1 Start-Up Capital Estimation (Expansion Capital Estimation)

9.2 Loan Details

9.3 Business Risk and Mitigating Factor

9.4 Financial Projections

9.5 Sales Forecast And Sales Assumption

9.6 Income Statement (P&L) Account

10.  Conclusion 

Please note that a bad business plan can ruin your business reputation and also cause loss in investment, so be very diligent while buying a business plan.

Be rest assured we provide great value for your money by making sure our business plans pass through rigorous steps before they are sold or given to a customer we make sure to provide you with accurate analysis and data set that directs your business decisions the right way.

Supermarket business plan in Nigeria Conclusion:

Setting up your own successful supermarket is not an easy task. But if you are willing to put in the work needed, you will be able to reap all of the benefits that come with it The supermarket industry in Nigeria is booming and it is the second-largest employer in Nigeria. It has also been a key contributor to the growth of the Nigerian economy. The future of the supermarket industry in Nigeria is looking very bright as a result of its continued growth and success

The first thing in business aside all I’ve said is acquiring a business plan which sets a futuristic success plan and guidelines in achieving desired goals and objectives you have for your supermarket business.

You can get a supermarket business plan in Nigeria from us at NaijaCEO

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Micah Erumaka

About Micah Erumaka

Micah Erumaka is the Founder of LiaonCEM solutions which owns NaijaCEO. He is an Internet Entrepreneur and a content creator. After the failure of his first company at age 18 he started NaijaCEO to help entrepreneurs with the information they need in operating a successful business in Africa

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How to Start a Supermarket Business in Nigeria (Supermarket Startup Secrets)

A supermarket business in Nigeria is a retail establishment that sells a wide range of products to customers, typically including groceries, household items, personal care products, and sometimes even electronics and clothing.

Supermarkets offer a convenient one-stop shopping experience where customers can find a variety of products under one roof.

Key characteristics that define a supermarket business in Nigeria are; Product variety, layout and organization, self-service, size and space, convenience, brands and choices, pricing and promotions, customer experience, and technology.

Starting a supermarket business in Nigeria can be a lucrative venture due to the country’s growing population and consumer demand for convenient shopping options.

However, it’s important to get the nitty-gritty of the business before delving into it. And that is why this article (how to start a supermarket business in Nigeria) was written especially for you.

Table of Contents

How much will it cost to open a supermarket in nigeria.

It will cost a minimum of ₦3,400,000 to open a supermarket business in Nigeria. This cost widely varies due to factors such as the location, size of the store, the range of products you plan to offer, the quality of fixtures and equipment, and other operational considerations. However, below is an estimate of the common categories of expenses you will likely incur when starting a supermarket business in Nigeria:

Keep in mind that this starting cost will vary based on your specific circumstances. Before starting your supermarket business, it is mandatory to conduct thorough market research and create a detailed business plan that outlines all potential expenses to be incurred.

Additionally, seeking advice from industry experts and business advisors in Nigeria can help you get a more accurate estimate of the costs involved in opening a supermarket in your chosen location and desired scale of operation.

How to Start a Supermarket Business in Nigeria

Here are the step-by-step procedures to start a supermarket business in Nigeria:

Step 1. Choose Your Scale of Operation

The first and foremost action step to take before starting a supermarket business in Nigeria is to determine your scale of operation. Your scale of operation means the size of the supermarket you desire to start; which could be a Large or Small size supermarket depending on your capital investment.

Generally, the term “supermarket” itself implies a larger size and a more extensive selection of products compared to smaller grocery stores or convenience stores.

While a small supermarket is often referred to as a “neighborhood grocery store” or simply a “grocery store.” but still offers a variety of food and household products for customers in a local community. In some regions, you might also hear terms like “corner store,” “convenience store,” or “corner shop” used to describe the same smaller supermarket that caters to the immediate neighborhood’s needs. The term used to describe a small supermarket depends on the location and regional language preferences.

Step 2. Conduct a Market Research

As usual, this step involves gathering information and analyzing data to make informed decisions about your supermarket business strategy. The purpose of conducting thorough market research is to minimize risks and increase your chances of success.

Below are areas of focus that must be covered during the market research of your supermarket business;

1. Identify Your Target Market and Location:

• Target Market: Determine the specific group of people who are most likely to become your customers. This involves understanding their demographics (age, gender, income level), psychographics (lifestyle, preferences, values), and buying behaviors (what they purchase, how often, etc.).
• Location: Choose a suitable location for your supermarket. This involves evaluating the local area’s population density, foot traffic, nearby competitors, accessibility, and potential customer base. A prime location will help attract and retain customers.

2. Research the Demographics, Purchasing Behaviors, and Preferences:

• Demographics: This includes information about the people who live in the area, such as age, gender, family size, and income. For example, if the area has a high proportion of families, you might want to focus on offering family-friendly products.
• Purchasing Behaviors: Understand how often people shop, what products they buy, and their spending habits. This knowledge helps you stock products that are in demand and adjust your pricing strategies accordingly.
• Preferences: Learn about consumer preferences, such as their preference for local products, organic items, or specific brands. This allows you to tailor your product selection to meet customer desires.

3. Study Your Competition:

• Competitor Analysis: Research and analyze existing supermarkets and grocery stores in the area. Understand their strengths, weaknesses, and unique selling points.
• Identify Gaps in the Market: Look for areas where your potential competitors might be falling short. These could be product categories they don’t offer, quality of service, pricing, or even customer experience.
• Unique Value Proposition (UVP): Identify what will sets your supermarket apart from the competition and leverage on it/them. This could be a special product range, exceptional customer service, unique promotions, or any other aspect that gives you a competitive edge.

This knowledge will guide your decisions regarding inventory selection, pricing, marketing, and overall business positioning.

Step 3. Create a Business Plan

The next step that immediately follows after conducting a successful market research is the creation of a Business Plan.

A business plan is a detailed document that outlines the entire scope and strategy of your business.

Creating a comprehensive business plan is essential in helping you clarify your vision, understand your business’s potential challenges and opportunities, and ultimately provide a roadmap for achieving your goals.

In addition, a business plan plays a convincing crucial role if you’re seeking external funding or partnerships.

In general, a good supermarket business plan must cover these areas;

• Business Goals
• Target Market
• Competitive Analysis
• Marketing Strategies
• Financial Projections
• Operational Plan
• SWOT Analysis
• Risk Assessment and Mitigation
• Exit Strategy (Optional)

Step 4. Legal and Regulatory Requirements

This step focuses on meeting the legal obligations and governmental regulations set by the government of Nigeria to all those who desire to operate a supermarket business in Nigeria. The primary purpose of these requirements is to ensure that your business operates legally, ethically, and in compliance with the laws of the country.

Here are the major requirements to be met by everyone who desires to start a supermarket business in Nigeria;

1. Business Registration with the Corporate Affairs Commission (CAC) in Nigeria:

The Corporate Affairs Commission (CAC) is the government agency responsible for registering businesses in Nigeria . Registering your business with the CAC establishes your business as a legal entity. You’ll need to provide details about your business, such as its name, structure, ownership, and address. This step formalizes your business and provides you with legal recognition.

2. Obtain Necessary Licenses and Permits:

Different licenses and permits may be required depending on the nature of your supermarket business and your location. These may include:

Business Permit Trade License Tax Identification Number (TIN) Health and Safety Permits

3. Other Relevant Regulations:

• Consumer Protection Regulations Rights: (such as accurate pricing, product quality, and fair business practices).
• Labor Laws, and
• Environmental Regulations

Failure to comply with these requirements will lead to legal penalties, fines, and even closure of your business. It’s essential to thoroughly research additional requirements that apply to your specific location, and consult with legal experts if needed, to ensure full compliance with all applicable laws and regulations.

Step 5. Location Selection, and Store Setup and Design

Location selection focuses on choosing the perfect physical location where your supermarket will be situated.

As easy as it may be to comprehend, know that the success of your business can be greatly influenced by the location you choose.

In choosing the right location for your supermarket business, these key elements must be factored into your decision-making process;

• The location must be strategic and accessible
• It must command high foot traffic
• It should have proximity to residential areas, schools, offices, and public transport

While store setup and design involve planning and arranging the physical layout of your store to optimize customer experience and product visibility. A good supermarket store setup and design should include;

• Supermarket layout for easy navigation and product display
• Quality fixtures for shelving, refrigeration units, lighting, and signage

These two attributes (Location selection, and store setup and design) have a direct impact on customer experience and the entire success of your supermarket business in Nigeria.

Step 6. Choose a Business Model

Selecting a suitable business model is a crucial step in starting a supermarket business. The business model defines how you will operate, generate revenue, and provide value to customers. There are different types of supermarket business models, each with its own advantages and considerations. Here are a few common types of business models :

• Conventional Supermarket: This is the traditional model where customers come to the physical store to shop for a wide range of groceries and household items. This model requires a physical store, inventory management, and a focus on in-store customer experience.
• Discount Supermarket: This model focuses on offering products at lower prices by emphasizing cost-cutting measures. It attracts price-conscious customers looking for deals and discounts.
• Specialty Supermarket: Specializing in a particular niche, such as organic products, gourmet foods, health and wellness items, or ethnic foods, will differentiate your supermarket and attract a specific target audience.
• Online Supermarket: Operating exclusively or predominantly online, this model involves taking orders through a website or app and delivering products to customers’ doorsteps. It requires a robust e-commerce platform and efficient logistics.
• Hypermarket: A hypermarket is a larger version of a supermarket that offers a wide variety of products, including groceries, clothing, electronics, and more, often in a single location.
• Warehouse Club: Similar to a membership-based business model, warehouse clubs offer products at discounted prices to members who pay an annual fee. The focus is on bulk purchases.
• Community Co-op: This model involves community members collectively owning and operating the supermarket. It foster a sense of community involvement and decision-making.

Factors such as your target market, location, available resources, competitive landscape, and market trends are what will determine the kind of business model that best suits your supermarket.

And lastly, it is important to align your chosen business model with your business goals and market research findings.

Know more about choosing the right business model f or your Supermarket business in Nigeria.

Step 7. Inventory and Suppliers

This step is all about managing the products you stock, ensuring a consistent supply from trusted suppliers, and implementing effective inventory management practices.

Below are ways to effectively and efficiently manage your inventory and suppliers;

1. Source Products from Reliable Suppliers and Negotiate Favorable Terms

• Supplier Selection: Choose suppliers that only provide quality products, consistent delivery, and competitive pricing. Research and establish relationships with reputable suppliers in various product categories.
• Diverse Range of Products: Stock a wide variety of products to cater to different customer needs. This could include groceries, fresh produce, household items, personal care products, cleaning supplies, snacks, and more.
• Negotiate Terms: Negotiate with suppliers to secure favorable terms, such as bulk discounts, payment terms, and delivery schedules. Building strong relationships with suppliers can lead to better deals.

2. Maintain Optimal Inventory Levels and Implement an Effective Inventory Management System:

• Optimal Inventory Levels: Balancing supply and demand is critical. Overstocking can tie up capital and lead to product wastage. While understocking can result in lost sales and dissatisfied customers. Determine the appropriate stock levels for each product category.
• Inventory Management System: Use technology to manage your inventory efficiently. Implement a point-of-sale (POS) system with inventory tracking features. This helps you monitor sales trends, track stock levels, and reorder products as needed.
• Reorder Points: Set up reorder points for each product to trigger reordering when stock reaches a certain level. This ensures that you restock before items run out.
• Stock Rotation: Practice First-In-First-Out (FIFO) stock rotation to prevent products from becoming expired or outdated. Arrange products so that older stock is sold before newer stock.

Keep in mind; Efficient inventory management ensures that you have the right products available when customers want to buy them. While astablishing a reliable relationship with suppliers helps you secure quality products on favorable terms. Ultimately, they both contribute to your supermarket’s success.

Step 8. Technology and POS Systems

Integrating modern technology into the operations of your supermarket business will enhance efficiency, accuracy, and customer experience of your supermarket business. Point-of-sale (POS) systems play a key role in managing sales, inventory, and customer transactions.

In other to successfully incorporate this modern technology these are elements that must be included;

• Sales Tracking: Technology allows you to track sales data in real-time. This data can be used to analyze which products are selling well, identify trends, and make informed decisions about your product offerings.
• Point-of-Sale (POS) System: A POS system is a software and hardware solution that handles customer transactions, sales records, and inventory updates. It streamlines the checkout process and provides accurate real-time data.
• Barcode Scanners: Barcode scanners read product barcodes quickly and accurately, simplifying the checkout process. They also link to your inventory system, ensuring that each sale is accurately recorded.
• Thermal Receipt Printers: These printers generate clear and high-quality receipts for customers. Receipts include information about purchased items, prices, and payment methods.
• Other Necessary Equipment: Depending on your business needs, you might also need equipment like cash drawers, payment terminals, touchscreen displays, and customer displays.

The implementation of technology and POS systems brings several benefits such as:

• Faster and more accurate transactions at checkout.
• Improved inventory management and reduced stockouts.
• Detailed sales reports for informed decision-making.
• Enhanced customer experience through quicker transactions and accurate receipts.

Tip: Choosing the right technology and equipment requires research and planning.

Step 9. Staffing and Training

Building a skilled and motivated team for your supermarket business and ensuring they have the knowledge and skills necessary to provide excellent customer service and efficiently manage store operations is paramount in the supermarket business.

Some of the ways effective staffing and training contribute to the success of your supermarket are;

• Improved customer satisfaction through friendly and knowledgeable staff.
• Smooth and efficient store operations.
• Reduced errors in transactions and inventory management.
• Increased employee morale and motivation, leading to better job performance.

That being said, below are the must staffs that every supermarket must have;

• Stock Clerks
• Shelf Attendants
• Store Managers

While tha training of the staffs should focus on; Customer service, product knowledge, and store operations:

Tips; When hiring, look for candidates with relevant experience, strong interpersonal skills, and a genuine interest in customer service.

Regular feedback from employees and recognition of employees by name can also boost employee engagement and loyalty.

Step 10. Security and Safety

You have to implement measures to protect both your customers and staff while also safeguarding your inventory and assets. -That is the essence of the security and safety measures.

The Security Measures include:

• CCTV Cameras: Closed-circuit television (CCTV) cameras should be strategically placed throughout the store to monitor activity. They deter theft, vandalism, and other unauthorized activities. CCTV footage can also be used for investigations if incidents occur.
• Alarm Systems: Alarm systems include intrusion alarms, motion detectors, and door/window sensors. These systems alert you and the security personnel in case of unauthorized access or break-ins.
• Security Personnel: Employing trained security personnel also helps prevent theft and maintain a safe shopping environment. They can monitor the store, check receipts at exits, and respond to security incidents.

Implementing security and safety measures offers several benefits such as:

• Crime Deterrence: Visible security measures discourage criminal activities, protecting your business and its stakeholders.
• Loss Prevention: Preventing theft and shrinkage helps maintain profitability.
• Enhanced Customer Confidence: A secure environment creates a positive impression on customers, making them more likely to return.
• Employee Well-being: Security measures also ensure the safety of your employees, contributing to their job satisfaction and morale.

Security Tip: When designing your security strategy, consider factors such as the layout of your store, high-risk areas, and the number of security personnel needed.

Step 11. Secure Funding

Due to the extensive processes involved in starting a supermarket business in Nigeria, it’s possible that your budgeted capital might prove insufficient for your anticipated expenditures, even after thorough business plan research. Occasionally, the projected costs in your business plan could be lower than the actual expenses incurred. The primary factor contributing to this miscalculation is inflation.

Should you find yourself in a situation where you realize that your available capital falls short of the required amount to establish your supermarket business in Nigeria, seeking additional funding becomes a prudent and strategic decision.

Below are funding options to explore;

• Personal Savings
• Crowdfunding

Don’t just accept any funding option rather choose the funding option that aligns with your financial situation, business goals, and risk appetite.

It’s advisable to consult financial experts and consider seeking professional advice before finalizing and making an external funding decision.

• How to Get Loan From UBA Bank
• Federal Government Loans for Small Business in Nigeria
• How to Get a Loan to Start a Business from the Government
• How to Get a Loan to Start a Business in 11 Steps

Step 12. Marketing and Promotion

Marketing and promotion of your supermarket business in Nigeria is all about strategies and activities you should undertake to promote your supermarket business, attract customers, and build brand awareness. This is crucial for creating a strong customer base and ensuring the success of your business.

Mainly, effective marketing and promotion strategies help your supermarket stand out in a competitive market.

Here are effective strategies used to market and promote supermarket business in Nigeria;

• Creating a Brand Identity: Such as your store’s name, logo, colors, and overall visual style.
• Utilize Online Presence to reach a wider audience.
• Utilize Local Advertising Channels: Such as newspapers, radio, and community bulletin boards to reach your local audience.
• Digital Marketing : Online advertising tools like Google Ads to target potential customers searching for products you offer.
• Influencer Marketing: Collaborate with local influencers who align with your brand to reach their followers and gain credibility.
• Promotions Strategies: Offer limited-time discounts, buy-one-get-one (BOGO) deals, bundle offers, or free samples to entice customers to visit your supermarket.
• Loyalty Programs: Implement a loyalty program that rewards frequent shoppers with discounts, exclusive offers, or points redeemable for future purchases. This encourages customer loyalty and repeat visits.
• Special Offers: Plan seasonal or themed promotions to keep customers interested and engaged throughout the year. This could include holiday sales, back-to-school offers, or summer discounts.

Just so you know, marketing and promotional strategy are more effective when you first understand (that is know) your target audience.

By Continuously monitoring and adapting your marketing strategies based on customer feedback and changing market trends you can ensure ongoing success.

KEY RESOURCES:

• How to Start a Business in Nigeria in 9 Easy Steps
• The Complete Guide: How much does it Cost to Start a Business?
• The Ultimate Guide: How to Start a Business in 11 Simple Steps
• How to Register a Business Name in Nigeria in 7 Easy Steps
• How to Write a Business Plan
• 32 Most Profitable Business in Nigeria
• How to Start a Ecommerce Business
• How to Start a Mini Importation Business in Nigeria (EASY GUIDE)

Final thoughts on starting a supermarket business in Nigeria

Starting a supermarket business in Nigeria requires careful planning, thorough research, and strategic execution. From determining your scale of operation to securing funding and implementing effective marketing strategies, they all play a crucial role in the overall success of your business.

In addition to the aforementioned steps; Maintaining a customer-focused approach will establish you a thriving supermarket business that meets the needs of your local community, attracts a loyal customer base, and contributes positively to the Nigerian retail industry.

Remember, adaptability and continuous improvement are key as you navigate the dynamic and competitive supermarket business landscape in Nigeria.

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Are supermarkets a good investment?

Supermarkets is a good investment under the right circumstances, but like any business venture, they come with their own set of opportunities and challenges. Whether a supermarket is a good investment for you depends on various factors, including your business acumen, market conditions, location, competition, and the strategies you implement.

What is the most profitable supermarket?

These are the currently most profitable supermarkets in Nigeria: Shoprite, Grand Square, CCD Superstores, Park ‘n’ Shop, SPAR Nigeria, Ebeano Supermarket, Hubmart, Addide Supermarket, Market Square, Justrite Superstore, Philhallmark Supermarket, and Mallmart Supermarket.

What is bigger than a supermarket?

A hypermarket is generally considered to be larger than a standard supermarket. A hypermarket is a type of retail establishment that combines elements of a supermarket and a department store. It offers a vast range of products, including groceries, clothing, electronics, household items, appliances, and more, all under one roof.

Are small supermarkets profitable?

Yes, small supermarkets is profitable if they are well-planned, managed efficiently, and cater to the needs of their target market. The profitability of a small supermarket mainly depends on various factors, including location, quality product selection, pricing strategies, customer service, and operational efficiency.

Is it hard to run a supermarket?

Yes it is hard to run a supermarket business. But the rewards and satisfaction of serving the community and building a profitable business outweigh the difficulties of running a supermarket business.

I am Eghosa Kester Igbinigie, the owner of StartBizEasy.com and Richnuggets.com. As a business enthusiast, writer, and speaker, I hold a degree in Business Administration (BSc) and own several successful businesses

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How To Start A Lucrative Supermarket Business In Nigeria: The Complete Guide

A supermarket is a large store that offers varieties of items for sale, which are classified into sections for customers to pick for themselves. A supermarket is an advancement on the traditional grocery store, and it forms a major component of every major society. Today, supermarkets run into hundreds in every major town and city both in developed and developing countries. Besides making life easy for dwellers of the society with the various commodities offered, the supermarket business contributes significantly to the world economy.

As of 2019, the global supermarket business was valued at US$11.7 trillion with a projected CAGR of 5% from 2019 to 2027. At the moment, China has the highest grocery market in value of $1.595 billion and the potential to grow by 5.5% CAGR by 2023. The United States of America comes close to China in grocery value of $1.494 billion. Other countries with leading grocery revenues are India ($510), Japan ($459b) and Brazil ($328b).

Nigeria has one of the largest grocery stores in Sub-Saharan Africa. As of 2017, Nigeria recorded over $44.8b in revenues from supermarket and grocery retail, with the food retail segment comprising $33.6b of these revenues. From 2017 till date, lots of new supermarket chains have sprung up all across the country to cater to the growing population. Nigeria’s population now stands at about 200 million people and has been projected to double by 2050. While this might have its adverse consequences, it holds a large grocery market retails in the country. More so, the supermarket industry is estimated to grow at CAGR of almost 10% by 2027. The supermarket business is found predominantly in areas such as Lagos, Benin City, Rivers state, FCT, Kaduna, Kano and Ilorin.

From time to time, more supermarket chains spring up in one major city or the other, and this explains why Nigeria has the fastest grocery market growth rate in Africa. As a matter of fact, the growth rate isn’t dropping anytime soon due to the growing competition among major supermarket chains. However, the supermarket industry in Nigeria is still at its maiden stage and can expand significantly. This makes it a brilliant opportunity for any investor in any part of the country. If you’ve decided to set up a supermarket business in Nigeria or any other part of Africa, here is a step-by-step guide to help you.

See Also : How To Start A Lucrative Cocoa Farming Business In Nigeria: The Complete Guide

What Is A Supermarket?

A supermarket refers to a large brick-and-mortar store where various commodities and groceries are displayed for sale. It is a self-service hub of commodities where the buyer walks through the aisles of items already arranged with their price tags attached and picks whatever items they want before making payments at the cashier point. Supermarkets are not as big as hypermarkets, but they’re bigger and provide more commodities than traditional grocery stores found in corners and streets of Nigeria.

What Is A Supermarket Business?

Starting a supermarket business describes all the activities involved in stocking up wares and retailing them for daily consumers. Setting up one would cost nothing less than 1 million Naira. A full-fledged supermarket in Nigeria in major cities could cost as much as N5 million to N10 million or more, depending on the volumes of groceries offered. Most Nigerians now prefer shopping at a supermarket to the regular grocery shops and the reasons are not farfetched. Besides the security and convenience that supermarkets offer, they also give shoppers conducive modern environment where they can make all their bulk purchases at once and pay via means other than cash.

See Also : How To Start A Lucrative Egg Hatchery Business In Nigeria: The Complete Guide

Business Opportunities In Supermarket Business In Nigeria And Around The World

The supermarket business comes with several other job opportunities, including the following:

1). Cashier Services:

Every supermarket enlists the services of two or more cashiers, depending on its size. These slots are mostly reserved for young people with excellent business acumen to relate with customers and conduct transactions.

2). Delivery Services:

Delivery services related to supermarkets is in two folds. All traditional brick-and-mortar stores frequently stock their supermarkets with groceries and other household items from wholesale distributors. They require the services of delivery personnel. On the other hand, ultramodern supermarkets now create digital platforms for people who cannot be physically present at the store to make their purchases. With the aid of mobile applications, people can access virtual supermarkets and have their purchases delivered to them.

3). Cleaning And Janitorial Services:

As inconsequential as it seems, cleaning and maintenance is a key service required in traditional supermarkets. This, therefore, leaves opportunities for cleaners and janitors in the supermarket business all across the world.

4). Security:

Another essential service required for the successful operation of a supermarket is security. Besides keeping the security personnel employed, supermarkets also need the services of CCTV technicians and operators.

5). Café Operations:

Some supermarkets choose to spice things up by creating an added section for cafe services. This could also be a job opportunity for cafe operators.

Facts And Benefits Of Supermarkets

• Supermarkets offer a variety of products and commodities, including foods and household items.
• Supermarkets make it easy to do all your shopping at one spot.
• Prices of commodities in supermarkets are relatively lower than prices elsewhere because supermarkets have a larger buying power since they buy directly from manufacturers.
• Supermarkets operate on self-service, which makes it comfortable for customers because they buy without pressure.
• China, USA, India, Japan and Brazil are countries with the highest revenues from the supermarket industry.
• Supermarkets offer quality products from trusted manufacturers.
• Customers are not compelled or deceived into picking items that they do not want.
• Supermarkets are often located in busy areas.
• In Nigeria, major cities and towns such as Port-Harcourt, Lagos state, Abuja, Benin City and Kaduna are some of the areas with the largest concentration of supermarkets.
• Supermarket business gives no room for debts or credit.
• Supermarkets do not involve needless haggling of prices of commodities.
• A Netherlands policy holds that if there are four people in the checkout lane and the points are not open yet, you get your groceries for free.
• In Rhode Island, it is prohibited for supermarkets to open on Thanksgiving.
• In Europe, there are platforms for people to buy goods discarded from regular supermarkets. These platforms are called social supermarkets.
• An average person spends 43 to 45 minutes at the supermarket on each visit.
• People shop more on Saturdays than on other days.
• About 25% of grocery income is made from the sales of processed sweets.
• According to reports, if you go to the supermarket when you’re hungry, you’ll likely spend more money on items that contain calories.
• On weekdays, people shop more within 4pm and 5pm.
• Only 3% of shoppers buy groceries online.

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Types of supermarkets.

There are precisely no types of supermarkets. Supermarkets themselves are a type of stores which is often mistaken for other retail stores. As a matter of fact, there is very little difference between convenience stores and supermarkets. However, one can clearly tell a supermarket clearly from a drug store or a hypermarket. Meanwhile, people could choose to spice up their supermarkets by adding other related services such as a cafe.

Beyond this, supermarkets can be classified into two:

1). Traditional Supermarkets:

These are the regular supermarkets located at busy spots of towns and cities and require your physical presence to make your purchase.

2). Online Supermarkets:

Also known as e-supermarkets, online supermarkets are just gaining grounds in some parts of the developed world. As of now, only about 3% of shoppers prefer to use digital supermarket platforms.

How To Start A Lucrative Supermarket Business In Nigeria: Step-By-Step Guide

1). create a business plan:.

To start up a lucrative supermarket, you need a business plan that involves all the critical decisions and steps to take. Your business plan entails the size of your capital or how to generate the necessary capital. You also need to decide on what type of supermarket you intend to start. Since the common type is the traditional physical supermarket, you need to determine the size of your supermarket. After that, conduct a feasibility study on the success rate of a supermarket in the selected area.

2). Get a Business Site:

After securing the key factors such as capital, get a favourable business site for your supermarket. In some parts of Nigeria, plazas and large shops are commonly used. The most important factor is that the supermarket has to be situated in a busy area where the dwellers are at least middle-class people.

3). Set Up The Supermarket:

The next stage is to set up the supermarket with the required facilities, including cashier’s desk and chairs, shelves, security devices, labels, price tags, baskets and trolleys, etc.

4). Employ Staff:

After setting up the supermarket, it is now a good time to employ labour. A typical supermarket requires services of cashiers, security personnel, delivery personnel, a manager, drivers and janitors, etc.

5). Connect With Manufacturers And Wholesale Distributors And Stock Up:

You need to network with several categories of people in the grocery industry such as manufacturers, wholesale dealers and distributors, among others. Strike deals with manufacturing companies to get wares at favourable prices and stock up your supermarket with the items that your feasibility study revealed to be the common items needed in the area.

6). Register Your Business:

For smooth and undisturbed operation, you should register your business with the Corporate Affairs Commission.

7). Run Advertisements:

Apart from those who walk by the new supermarket, not many people would know that there’s a new supermarket in town. This is why you need different forms of adverts, depending on which ones you can afford or which is most applicable in your locale.

See Also: How To Start A Lucrative Frozen Shrimps And Prawns Business In Nigeria: The Complete Guide

Challenges Of Supermarket Business In Nigeria

• High startup costs
• Maintaining a supermarket business could be expensive and demanding.
• Supermarkets are not available to people in small towns and villages.
• Erratic power supply in most parts of Nigeria.
• High risk of robbery attacks.
• Distrust between supermarket owners and employees
• Most commodities cannot be sold in bits.
• Poor road network makes delivery difficult and expensive.
• Difficulty in reaching across to manufacturers outside the country.
• High shipping costs.
• High costs of rents in major cities.

See Also: How To Start A Lucrative Sesame Cake Production Business In Nigeria: The Complete Guide

To Sum It Up

A supermarket business contributes maximally to the economy of any society, and not just brings massive profits to the investors. The supermarket business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide sales network. If you’re looking for a lucrative business to venture into, the supermarket business in Nigeria is a great option to explore.

Trying To Secure A Business Loan? Finance? Or Investment? You can now greatly increase your chances of getting the loan/investment you need with our bank and investor ready professional MBA standard business plan writing service. Writing a bank and investor ready professional supermarket business plan can be challenging. If you need a professional and affordable business plan service, StartupTipsDaily’s MBA standard professional business plan writing service is perfect for your small business. All you have to do is request an understanding of your proposed business model, and you’d have a professional MBA standard businesses plan ready for you anywhere within 5 to 14 days. You can click here to get started with using StartupTipsDaily’s professional business plan writing service to create the perfect business plan that’d get accepted anywhere.

What are your thoughts on how to start a supermarket business in Nigeria? Let me know by leaving a comment below.

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