business model of supermarket

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The implementation of the model for a supermarket

The Business Model Canvas has been adopted to analyse and reproduce several business models operating in Uganda.

1. Description of the business

More precisely, the case study considered in this report concerns the investigation of a business regarding a service deliver as the supermarket.

The business model canvas reported in Fig. 1 represents the definition of a business, which has been realised by starting from the analysis of data concerning this specific successful business, managed by Luteete Josephine.

The aim of this business model canvas consists in defining and describing the successful factors characterising a supermarket, started in 2011 thanks to the first granted loan of Wekembe of about 1 million Ugandan schillings. Actually, the entrepreneur has received the second loan for 1 million Ugandan schillings. Principally the entrepreneur, supported by 5 part-time employees or 2 full-time collaborators, undertakes this business. She reaches at least monthly revenues for 15 millions Ugandan schillings and profits for 2,5 millions Ugandan schillings in a month.

The entrepreneur started this business by adopting a small shop. Due to the good performance obtained during the first years, she enlarged her business by building a bigger shop, close to the capital city Kampala, thanks to the financial sustainability from microcredit institutions. The potential for this business is good, but it is necessary to be competitive due to the presence of other 5 supermarkets in the same area.

2. Building blocks description

Customer segments.

Clients who purchase at the supermarket are considered composing the mass market. The typology of products sold by the supermarket is wide and very different and this leads several varieties of people to buy common goods there. Buyers are considered also users, but this is not assured, because of the wide-ranging purchases a person usually performs in supermarkets. In fact, some clients buy products only for the sustainability of their children and others to satisfy the necessities of the whole family.

The potential for this business is good, due to the presence of copious loyal clients who purchase regularly and new customers who change the supermarket where to buy at or experiment this way to shop for the first time.

The good accessibility of the shop in the area of the capital city Kampala, ensures frequent visitors and regular purchases by people with good purchasing power.

Fig. 1: The business model canvas of a supermarket

Value propositions

The supermarket sells a wide variety of commodities necessary for everybody in their daily lives. Among these products it is possible to find primarily food and beverage in different assortments, detergents to clean house and clothes and products for the personal hygiene. Obviously, due to the greatness of the supermarket, it is possible also to find essential accessories for cooking and cleaning, such as kitchen utensils, basins and mops. Some of these commodities are displayed below in Fig. 2, 3 and 4.

Fig. 2: Supermarket commodities

Fig. 3: Supermarket commodities (2)

Fig. 4: Supermarket commodities (3)

The offered value to customers consists in the presence of high quality products at convenient prices. In fact, the supermarket has to keep prices equal or lower than competitors’ charges in order to retain loyal clients and attract new ones. The wide offer of commodities ensures good accessibility, especially to products that are not usual to find in small areas or villages. The huge size of the shop lets the entrepreneur sell some kinds of product in many varieties. As shown in the pictures above, the organisation of goods is accurate and coherent on the basis of complementary products, to stimulate the purchase and facilitate the finding of products for the final client.

The distribution of products occurs through a big shop, owned by the entrepreneur. She might begin the business by renting a small shop by using the loans received from microcredit institutions. If the business works well, the entrepreneur may think to buy the shop and enlarge her activity in the future.

The adoption of this channel is the most suitable for this business, due to the wide variety of products it is able to contain in a coherent order and the frequent flow of clients who visit the supermarket. Moreover, distributing products through a central shop ensures a good visibility and accessibility to all customers.

Customer relationships

The customer relationship developed with final clients is based on personal assistance through the service delivered by employees. In fact, the presence of collaborators inside the supermarkets allows consumers to ask for some information, receive suggestions about the adoption of goods and ask for restocking some missed commodities on the shelves. The ensured assistance from employees guarantees clients reassurance and promotes their visits to the supermarkets. It is important to keep personal relationships with clients, especially during the delivery of services.

The entrepreneurs might adopt some advertisement devices in order to promote the awareness of the shop among clients. One of these strategies consists in wearing a uniform, i.e. a t-shirt, with the name of the shop and its address written on the back. Employees, who wear this uniform during their working time, promote also the consciousness of the shop. An example of this advertisement is displayed in Fig. 5.

Fig. 5: The uniform with the supermarket generality

Revenue streams

Due to the frequency in purchases and the abundance in offered goods, the supermarket records high monthly revenues. The pricing of products consists in adding a 20% mark-up on each unit product cost; this method is substantially based on goods expenses as the starting item to identify the unit-selling price.

The entrepreneur’s account profits for nearby 2,5 millions Ugandan schillings each month. Considering fixed costs around 540,000 Ugandan schillings and the 20% of mark-up mentioned above, it is possible to approximately figure out monthly revenues for 15 millions Ugandan schillings.

The monthly profit amount comprises also the entrepreneur’s salary and the monthly depreciation of the shop that is not considered in the monthly cost analysis.

Key resources

The business requires the presence of the entrepreneur to manage most important decisions about the direction of the shop and run the entire activity coherently and synergistically. Furthermore, the employment of 5 part-time collaborators or alternatively 2 full-time employees is necessary to develop all the activities concerning the storage, the disposal of products on the shelves and client assistance.

A shop is required to have enough space to show all commodities. More precisely, the supermarket should have size between 40 to 60 square metres and more central is its location respect to the city centre and more the accessibility is ensured.

The stock of commodities is necessary to start the business and ensure the continuous availability of products to clients. Due to the frequent purchases, the refurnish of products in the warehouse and on the shelves is a prerequisite for this business.

The initial investment is necessary for the entrepreneur, especially to build the shop. For instance, to build a shop with the size mentioned above, it requires nearby 50 millions Ugandan schillings. Beyond the venture for facility, a consistent investment has to be spent to buy the first stock of products to equip the shop. Microcredit institutions might provide this amount of financial resources in order to stimulate entrepreneurial activities in poor areas.

Key partners

The main important partners to keep relationships with are commodities suppliers. The entrepreneur has to sustain relationships with almost 5 different suppliers in order to ensure wide variety of products that needs to be provided all the weeks. These suppliers might be present in the area close to the supermarket and this will facilitate the personal visit of the entrepreneur to make orders, at least twice a week.

As mentioned above, microcredit institutions are fundamental partners who ensure the financial resources and strategic suggestions in the preparatory steps to let the business start. Moreover, these organisations continue to support the entrepreneurs during the first years, in order to allow them to collect savings to self-finance the business in the future.

Key activities

Several activities are necessary to let the supermarkets work efficiently and with effectiveness. The entrepreneur has to be incessantly updated about suppliers’ offers in order to satisfy all clients’ requests and stimulate their purchases. As the supermarket delivers products to mass markets and due to the extent of this segment, the entrepreneur should push some new products with higher prices or be more aggressive than competitors to understand customers’ behaviour in specific situations.

The updating activity occurs also when the entrepreneur personally visit suppliers to order new stock. The continuous availability of stock inside the shop represents one of the most important offered values to clients, who preferably purchase all needed goods in one single moment.

After the visit, the order and the procurement of products occur. The entrepreneur negotiates the price of the provision and pays instantaneously the total amount of the expenditure.

Once the merchandise reaches the warehouse of the supermarket, employees dispose goods on the shelves with respectively tags with prices and promotions displayed on. They also manage delays in deliveries and collect post sales information to share with the entrepreneur, in order to keep them in consideration for next orders.

The product selling ends the circle of activity characterising the realisation of this business. The commodities sale occurs inside the shop during opening hours; a high service is always ensured to clients thanks to the unceasing assistance ensure by employees.

Cost structure

The cost structure of this business mainly considers fixed expenses, such as the employees’ salary and the costs incurred for transportation to visit suppliers 4 times each month. In fact, each employee receives a salary that might range between 60,000 and 150,000 Ugandan schillings. In order to make an approximation about the monthly total amount of costs the supermarket has to support, it is possible to set an average salary of about 500,000 Ugandan schilling paid for all the employees.

Furthermore, the entrepreneur, who visits the suppliers 4 times each month, has to pay nearby 40,000 Ugandan schillings for transportation.

Considering the total monthly revenues figured out above in the report and the amounts of profit and costs incurred each month, it is possible to evaluate the total expenses the entrepreneur pays for the whole provision. In fact, she spends about 12 millions Uganda schillings each month to ensure the availability of products on the shelves of her supermarket.

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3 essential pieces of the supermarket business model

by strategyaudit | Nov 27, 2014 | Branding , Category , Change , Marketing , retail , Small business | 0 comments

A short while ago, I posted “ 10 strategies for SME’s to beat the supermarket gorillas at their own game ”  which generated quite a bit of comment and feedback. Amongst the feedback were a number of requests to go into more detail on each of the strategies,  and so this is the first of the series, focussed on understanding the business  model of the supermarkets.

I deliberately used the word “Gorillas” because of the extraordinarily concentrated nature of Australia’s supermarket retailers, with Coles and Woolworths between them holding over  70% of FMCG sales depending on the category, and whose numbers you believe.

You know the old question: “where do the 500kg gorillas sleep?”

Answer: “anywhere they bloody like”

That was the way it was, a comfy duopoly, however, more recently there have been some major strategy alterations by Coles which has dramatically lifted their financial performance, and Aldi has successfully carved out a growing niche as a third retail presence. In addition, there are still some very good independent retailers around operating out of the wholesaler Metcash, who also competes with some of  their own and franchised retail outlets.

This mix, combined with the opportunities suppliers have to sell into food service and institutional markets and increasingly direct to consumers via the net and other means makes for an environment where the agile and insightful suppliers can be very successful despite the obstacles, but it is a very challenging environment.

The concept of business models is well known, in summary, it is the expression of how a business makes money. It always involves a matrix of revenue generated, the fixed and variable costs of generating that revenue, and the choices that the business makes about its customers and how they will be serviced, and the way they incur the costs of that servicing.

Supermarkets are a great example of a number of seemingly similar competitors that have slightly differing business models. At a macro level they have strong similarities, relying on volume, price, and shopper numbers to succeed, but everyone who shops knows that Woolworths is not Coles, is not Aldi.

However, they do have some common building blocks.

• Shoppers buy products, paying at the checkout.
• Suppliers “pay” for shelf space via a range of charges levied for every variable the retailers can dream up. Volume discounts, payment terms, promotional levies, preferred shelf positioning, promotional slots, access to sales information, and a host of others. Some are items for which suppliers receive an invoice, others are taken as discounts off the invoice price, increasingly applied automatically as a part of the trading term package.
• Fixed costs are a significant part of retailers total costs, made up of the provision of the retail floor space, the logistics infrastructure and personnel. Supermarkets attack their fixed cost base aggressively using their scale as negotiation tools with landlords and logistics suppliers, while keeping a very substantial proportion of front line retail staff as casuals rather than permanent employees so they can better adjust staff levels to match activity. The sorts of choices retailers make are between high density shopping centre locations Vs stand alone locations. There are costs and benefits to each which are considered as a part of their strategic decision making.
• The biggest variable cost is the cost of good sold, and they similarly use their scale to manage those costs downward. Tactics vary between retailers, but the core game is to maximise their margins while keeping prices as low as possible to attract the volume buyers. This is an extremely delicate balance.
• Transaction costs are usually pretty well hidden in most businesses, but are really significant in the case of supermarkets simply due to the number of transactions they make.  For example, there is a cost to managing the buying relationship with a supplier, but  the larger the supplier, the less is the total costs/unit of sale of managing that relationship. This has led to a dramatic reduction of the number of suppliers supermarkets have in any category over the last 15 years or so a trend further accelerated by the increasingly common strategy of limiting the number of proprietary brands in any category  substituting house-branded products, and reducing the number of relationships to be managed. This has made negotiating shelf space increasingly hard, and because of scarcity, increasingly expensive for suppliers, in turn putting extreme pressure on small suppliers.
• As in any market, no retailer can be all things to all people, so each makes the choice of the “ideal” customer, and markets towards them, grateful for any overlap. Increasingly the marketing is being supported by customer loyalty cards and the data mining and personalised promotional opportunities that technology is delivering, but the fundamental measures of success remain unchanged: number of shoppers, share of wallet, and basket size.
• The two major retailers have very large marketing budgets which they spend in a wide  variety of ways, across all channels of communication with customers and potential customers, and often in joint activity with their suppliers, which inevitably, the suppliers end up funding in return  for volume.  The smaller the retailer, the less “mass market” they are, so the tactics tend to differ, although strategically, finding willing supplier partners is a core part of every retailers marketing mix.
• Consumers generally want choice when they are in a supermarket, the more the better, in any category. Woolworths and Coles stores carry 12-20,000 Sku’s  (Stock keeping unit) depending on the size and location of the store, a typical IGA might carry 8-10,000, while Aldi carry just over 1,000. The sku’s carried in any store also reflect of the demographic and cultural mix. The Woolworths store in Auburn in Sydney has a significantly different product mix to the Woolworths of a similar size in Double Bay.
• Every retailer uses some form of category management disciplines as a means  to monitor, adjust and locate their inventory onto the sales face in the way that best meets their customers needs and maximises impulse pick-up. This is always a data intensive mix of the volume and margin of the individual Sku, (such as Ski strawberry yoghurt 200gm) group of similar Sku’s (all strawberry 200gm yoghurt) subcategory (all strawberry yoghurt) and category (all yoghurt) and between categories. They make choices about how many brands and types to keep in stock, where they put them, on shelf and in relation to other yogurts, and indeed other chilled products. A facing of yoghurt added is a facing of some other product gone, as the sides of the stores are not elastic. At the core of the category management activities is the need to best satisfy consumers, whilst competing effectively and delivering maximised margins.

Being agile, persistent,  and prepared to experiment are about the best qualities a supplier to supermarkets can have.

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• Set objectives by deciding what not to do. | StrategyAudit - […] to Recognise the mechanics of the supermarket business model, and the resultant infrastructure necessary to service this model, is…
• The least understood large cost impacting small business: Transaction cost. | StrategyAudit - […] original post that started the series is here, followed by the more detailed posts, 1, 2, 3, 4, […]
• Barriers and opportunities for small business innovation in supermarkets. | StrategyAudit - […] The first expanded post was the 3 essential pieces of the business model […]
• 6 Category Management ideas for small business at Christmas | StrategyAudit - […] the first here, the second […]

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Supermarket Business Plan

MAR.17, 2023

1. Supermarket Business Plan Template and Sample

This business plan to open a supermarket will help you create a comprehensive business plan for your supermarket. This plan will help you outline your marketing strategy, financial projections, operations, and personnel plans.

Your marketing strategy should include a detailed description of your target market and the methods you plan to use to reach and retain customers. Your financial projections should include a detailed breakdown of your projected expenses, net income, and cash flow. Your operations plan should outline your strategies for stocking the store, implementing customer service and loyalty programs, and managing the store’s day-to-day operations.

The plan can be used as a Farmers Market Business Plan or for any other business.

2. Executive Summary

Business overview.

Bella Supermarket is a full-service grocery store that offers a variety of fresh and organic products to the local community. The grocery supermarket store will provide a wide selection of grocery items, fresh produce, dairy, frozen items, and specialty items. Bella Supermarket will also offer an online ordering and delivery service for customers who prefer to shop from the comfort of their homes.

The store will feature a full-service deli and bakery and a prepared foods section with a variety of ready-to-eat meals like a Wholesaling Business Plan . Bella Supermarket will also feature a section dedicated to natural and organic products to meet the growing demand for healthier food options.

Bella Supermarket will be located in a highly visible location with ample parking and easy access from the highway. The store will be open seven days a week and offer competitive prices to attract customers. Bella Supermarket will also offer a loyalty program to reward frequent shoppers.

Bella Supermarket will focus on providing excellent customer service and a friendly shopping environment. The store will be staffed with knowledgeable employees who can help customers find their desired products. The store will also have an in-house nutritionist who can provide advice and guidance on healthy eating.

Bella Supermarket is committed to giving back to the community and will actively participate in local events and organizations. The store will also make an effort to source local products whenever possible.

Introducing Bella Supermarket, a full-service grocery store specializing in fresh, healthy, and affordable food products. Our selection of products includes

• Dairy products
• Frozen foods
• Fruits and vegetables
• Snacks and beverages
• Household and health care items
• Organic and natural foods
• Prepared meals
• Bakery products
• Non-food items (cleaning supplies, pet supplies, etc.)

Customer Focus

Our main customer focus is the families in our local area who are looking for an alternative to traditional grocery stores. In the Retail Discount Store Business , we will provide fresh, organic, and locally sourced produce, ethically sourced meats, and a wide selection of specialty items that cater to our target customer base. We will also provide a welcoming and comfortable shopping experience, with friendly customer service and knowledgeable staff, to ensure that customers have a pleasant and enjoyable shopping experience.

Management Team

Our management team consists of experienced professionals in the retail supermarket industry with expertise in marketing, finance, operations, and customer service. Our team is committed to delivering a superior customer experience and will ensure that our store is well-stocked, clean, and inviting. Our team will also work closely with local farmers and suppliers to ensure that our store has the freshest and highest quality produce, meats, and specialty items available.

Success Factors

We will be successful if we can build a loyal customer base by providing an exceptional shopping experience, offering quality products at competitive prices, and providing excellent customer service. Similar to the Old Style Corner Store Business Plan , we will also need to ensure that we stay up to date with industry trends and changes and remain competitive within the local market. Additionally, we will need to build strong relationships with our neighborhood supermarkets, local farmers, and suppliers to ensure that our store has the best selection of fresh and organic produce and meats, as well as specialty items.

Financial Highlights

The financial highlights of this supermarket’s business plan provide an overview of the expected financial performance of this supermarket. The plan projects a net income of £1.1 million for the first year, with a projected growth rate of 10% for the following years. The plan also projects a gross margin of 30% and a net profit margin of 5%. Additionally, the plan estimates total operating expenses of £750,000 for the first year.

• Net Income: £1.1 million (first year) with a 10% growth rate for subsequent years
• Gross Margin: 30%
• Net Profit Margin: 5%
• Operating Expenses: £750,000 (first year)

3. Company Overview

Who is bella supermarket.

Bella Supermarket is a family-owned and operated grocery store in the Texas area. Our goal is to provide the local community with a convenient and affordable shopping experience. We are committed to providing quality products and excellent customer service.

Our store will provide a variety of products, including fresh produce, meat and poultry, dairy, frozen foods, canned goods, health and beauty products, and other grocery items. We also plan to offer a variety of specialty items, such as organic and natural foods, gourmet cheeses, and international items. We will also offer a wide selection of prepared foods, such as sandwiches, salads, and prepared meals.

At Bella Supermarket, we are dedicated to providing a pleasant shopping experience. Our friendly and knowledgeable staff will be available to assist customers with their shopping needs. We will also offer delivery services for those customers who are unable to shop in person.

We will strive to offer competitive pricing on all of our products. We will also work closely with local farmers and producers to ensure that our customers are receiving the freshest and highest-quality products available.

At Bella Supermarket, we value our customers and will strive to provide a pleasant shopping experience. We look forward to serving the Texas community and participating actively in the local economy.

Bella Supermarket History

Bella Supermarket has been a family-owned and operated business since its inception in 1989. The founders, Jack and Maria Bello, opened the original store in San Antonio, Texas. Since then, Bella Supermarket has expanded to over twenty stores throughout Texas.

The mission of Bella Supermarket is to provide a convenient and affordable shopping experience with excellent customer service. Bella Supermarket has invested in modern technology, such as self-checkout kiosks, online ordering, and digital payment systems to achieve this. They also offer weekly specials and discounts to help shoppers save money.

Bella Supermarket strives to be an active community member, reaching out to local schools and charities. They host weekly events such as kids’ cooking classes and nutrition seminars to educate customers about healthy eating habits.

Bella Supermarket has also taken steps towards environmental sustainability by reducing its plastic bag usage and utilizing energy-efficient lighting systems. In addition, the company works with local farmers and businesses to provide fresh and organic produce.

Bella Supermarket is a great place to shop for value-conscious shoppers who want quality groceries at a great price. Their commitment to customer service and environmental sustainability makes them an ideal business partner for any community. With its state-of-the-art technology, extensive selection, and commitment to quality, Bella Supermarket should be the go-to choice for any grocery needs.

4. Industry Analysis

Supermarkets are an integral part of the retail industry in the United States. Supermarkets offer customers a wide selection of grocery and other products, including fresh produce, dairy, frozen foods, health and beauty products, household items, and more. The supermarket industry has seen steady growth over the past five years and is projected to grow at a rate of 3.5% per year over the next five years. This growth is driven primarily by an increase in the number of households, as well as an increase in disposable income.

Texas is the second-largest state in the US, with a population of 29.7 million. Dallas, Houston, and San Antonio are the three largest cities in the state. Dallas has the highest concentration of supermarkets in the state, with over 5,000 locations. Houston and San Antonio have over 3,000 and 2,000 supermarkets, respectively. The majority of supermarkets in Texas are independently owned and operated, though a few are part of large chains.

The supermarket industry is highly competitive, with large chains such as Kroger, Walmart, Safeway, and more vying for shoppers’ business. To remain competitive, supermarkets must offer various products at competitive prices. The industry is also highly regulated, with food safety standards, zoning regulations, and other restrictions that must be followed to remain in business.

The supermarket industry is highly fragmented, with large chains such as Kroger, Walmart, and Safeway accounting for the majority of the market share. Smaller regional chains, as well as independently owned and operated supermarkets, make up the rest of the market. The industry is highly competitive, and supermarkets must offer various products, competitive prices, and excellent customer service to remain competitive.

5. Customer Analysis

Demographic profile of target market.

To effectively market and develop a successful business plan for a supermarket in Texas, it is important to understand the customer base. Texas has an estimated population of 29.7 million people and is the second-largest state in the US. The state has an extremely diverse population, with a mix of rural and urban areas and many immigrants from Mexico and other countries.

The state is divided into four major regions: East Texas, Central Texas, North Texas, and South Texas. Each region has different characteristics, such as economic, political, and cultural. Understanding the different regions and their differences can help create a better business plan and marketing strategy.

The majority of the population in Texas is made up of White non-Hispanic individuals at 44%, followed closely by Hispanic individuals at 39%. African-Americans and Asian Americans make up around 14% and 3% of the population, respectively. The population’s median age is 33.7, with the largest age group being 25 to 34-year-olds, who make up 22% of the population. The median household income is £58,000, and the poverty rate is 16%.

Customer Segmentation

To effectively target the right customer base for a supermarket in Texas, it is important to segment the customer base into different demographic groups. The segments could include:

Young Families – This segment includes families with children under the age of 18. These families are typically looking for affordable, fresh food options and convenience.

Millennials – This segment includes individuals between the ages of 18 and 34. They are looking for convenience and healthy food options and are more price-conscious.

Seniors – This segment includes individuals over the age of 65. They are typically looking for convenience, fresh food options, and value.

6. Competitive Analysis

The supermarket business is a highly competitive industry, with numerous large operators vying for market share. This business plan section examines the current competitive landscape and identifies the strengths and weaknesses of both direct and indirect competitors.

Direct and Indirect Competitors

Direct Competitors

Supermarkets in the local area are direct competitors in the supermarket business. Walmart, Kroger, Safeway, Target, and other regional grocery store chains fall into this category. In addition to grocery items, prepared foods, household items, and other convenience items, these competitors offer similar products and services. These competitors also offer competitive pricing and may also offer discounts and other promotions to attract customers.

• Well-established relationships with suppliers, allowing them to offer competitive prices.
• Brand recognition and loyalty among customers.
• Expertise in the industry and a wide selection of products.

Weaknesses:

• High overhead costs associated with operating multiple stores.
• Limited marketing budgets, leading to inadequate customer awareness.
• Lack of flexibility in responding to changes in the market.

Indirect Competitors

The indirect competitors in the supermarket business are non-traditional grocery stores. These include convenience, discount, drug, and online grocery stores. These competitors offer similar products and services but may not offer the same level of convenience, selection, and pricing as a traditional supermarket. These competitors may also offer additional services such as pharmacy, banking, and other services. Additionally, these competitors may offer discounts and other promotions, such as loyalty programs and discounts for frequent shoppers.

• Lower overhead costs associated with limited store locations.
• Ability to offer competitive prices due to lower overhead costs.
• Innovation and flexibility in responding to changing market trends.
• Limited brand recognition and customer loyalty.
• Lack of expertise in certain areas of the business.
• Inadequate marketing budgets, leading to limited customer awareness.

Competitive Advantage

Supermarkets have several competitive advantages over their competitors. Supermarkets offer a wide selection of items and competitive pricing. They also offer convenience to their customers, as they are often located close to the customer’s home. Supermarkets also have the ability to offer loyalty programs and special promotions to their customers. Additionally, supermarkets often have well-trained staff to help customers find the necessary items. Finally, supermarkets can often provide customers with a more personalized shopping experience.

7. Marketing Plan

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The marketing plan for starting the supermarket business will focus on targeting customers in our local area. We will use traditional and digital marketing methods to reach our target market.

Traditional marketing methods will include print and broadcast advertising, direct mail campaigns, and promotional events. Our print and broadcast campaigns will focus on highlighting the unique features and benefits of our supermarket, such as our wide selection of fresh produce, organic and gluten-free options, and competitive prices. Our direct mail campaigns will target local households and offer special discounts and promotions. Finally, we will host promotional events at local parks and other public spaces to attract new customers and help build brand awareness.

Our digital marketing plan will use social media platforms, our website, and search engine optimization (SEO) to reach our target audience. Our social supermarket campaigns will highlight our products and services while engaging our followers with interesting content related to food and nutrition. Our online supermarket business plan’s website will feature our products, services, and promotions and allow customers to order online. Finally, our SEO efforts will optimize our website for local search terms, such as “supermarket near me,” to ensure we are visible in local search results.

Our direct competitors will be other local supermarkets offering similar products and services. These competitors will likely have similar price points, promotions, and customer service.

Our indirect competitors will be other retailers that offer some of the same products and services as our supermarket, such as convenience stores, health food stores, and online grocery delivery services. These competitors may offer some of the same products as us at lower prices or may offer convenience and other services we cannot.

Promotions Strategy

The business will utilize various promotional tactics to create awareness and draw customers to the store. The primary tactics will include:

• Social media: The business will use social media platforms like Facebook, Twitter, Instagram, and YouTube to reach potential customers. The business can create brand awareness by posting engaging and informative content about the business, products, and services.
• Email marketing: The business will create an email database of customers and send them weekly emails to inform them of new products, promotions, and offers.
• Advertising: The business will advertise in local newspapers and radio stations to create awareness and draw customers to the store.
• Promotional events: The business will host promotional events such as cooking demonstrations and tastings to draw customers to the store.
• Loyalty program: The business will implement a loyalty program to reward customers for their loyalty and encourage repeat purchases.

Our pricing strategy will focus on providing competitive prices that reflect the quality of our products and services. We will also focus on providing value to our customers by offering discounts and other promotions. We will monitor our competitors’ prices to ensure our prices remain competitive.

8. Operations Plan

Operation functions.

• Store Management: This will include the day-to-day operations of the store, such as stocking shelves, managing customer service, and overseeing cash register transactions.
• Inventory Management: This will involve managing orders, tracking stock levels, and replenishing items as needed.
• Financial Management: This will include creating and managing budgets, tracking expenses, and creating financial reports.
• Marketing: This will involve creating and executing marketing plans, developing promotional campaigns, and analyzing customer data.
• Human Resources: This will involve recruiting, hiring, and training new staff; managing employee payroll; and ensuring compliance with labor laws.

5/15/202X – Develop Business Plan

5/22/202X – Research Potential Locations

6/1/202X – Secure Financing

6/8/202X – Hire Staff

6/15/202X Order Supplies

6/22/202X – Set Up Shop

7/1/202X – Promote Business

7/8/202X – Launch Grand Opening

7/15/202X – Monitor Performance

7/22/202X – Adjust Strategies

9. Management Team

The chief executive officer (CEO) will lead the business strategy, create the vision, and oversee the day-to-day operations. The CEO will be responsible for making sure that the business meets its objectives and meets customer satisfaction.

Company Staff

Company staff should include a team of experienced and knowledgeable personnel in order to ensure that the business runs smoothly and efficiently. This team should include

• Manager/Operations
• Assistant manager
• Store clerks
• Receptionist
• Security Personnel

10. Financial Plan

We are seeking funding of £2 million to cover the costs of setting up and running our supermarket business. This funding will cover the supermarket’s startup and operational costs.

Key Revenue & Costs

Key Revenue

The main source of revenue for the mini supermarket business plan is sales of grocery items and other related products, such as prepared foods, beverages, and other convenience items. Sales of prepared foods and beverages are expected to account for approximately 40% of total revenue, while grocery items will make up the remaining 60%.

The key costs associated with the Supermarket Business Plan include the following:

• Personnel costs (including wages, benefits, and taxes): 25%
• Rent, utilities, and other overhead costs: Approximately 10%
• Cost of goods (including food, beverages, and other products): 50%
• Marketing and advertising costs: 5%
• Miscellaneous costs (including insurance, maintenance, and licensing fees): 10%

Funding Requirements and Use of Funds

Funding Requirements

• Working capital – £200,000
• Expansion capital – £3 million
• Total Funding Requirements – £3.2 million

Use of Funds

• Construction – £1.5 million
• Equipment and Supplies – £700,000
• Inventory – £500,000
• Pre-opening Expenses – £200,000
• Working Capital – £200,000

Key Assumptions

These assumptions are essential for obtaining the company loan and estimating income and costs for the financials.

The supermarket will generate £1,200,000 in annual revenue.

The supermarket will have an average gross margin of 25%.

The supermarket will have an average markup of 25%.

The supermarket will employ 15 full-time employees.

The supermarket will have a start-up cost of £500,000.

The supermarket will have a monthly income of £100,000.

The supermarket will have an average inventory turnover of 8.

The supermarket will offer a variety of products and services.

The supermarket will have a customer base of 500 people.

The supermarket will have an average customer satisfaction rating of 8/10.

Financial Projections

All tables in PDF

• What is a supermarket business plan? A supermarket business plan is a document that outlines the strategy and goals of a supermarket business. It includes the goals and objectives, market analysis, marketing strategies, financial projections, organizational structure, and other important details. The plan should be comprehensive and provide an overall picture of the business, its operations, and its potential for success.
• What are the main types of supermarkets? Supermarkets are an important part of modern life, providing convenience and variety for shoppers. Several types of supermarkets are available today, each offering different services and products. The most common type of supermarket is the traditional grocery store, which offers many food items, including fresh produce and packaged goods. These stores also often have a selection of household and personal care items and health and beauty products. Another popular type of supermarket is the discount store, which offers various products at discounted prices. These stores typically have a smaller selection than traditional grocery stores but can be a great option for shoppers looking for bargains. Organic supermarkets are also growing in popularity, offering a selection of organic and natural foods. These stores often provide product information and have knowledgeable staff to help customers make informed decisions.
• What are the main sources of revenues and expenses for a supermarket? The main sources of revenue for a supermarket include the sales of food, beverages, and other merchandise, as well as services such as deli counters and bakery items. Expenses for a supermarket include the costs of purchasing inventory, labor, rent, utilities, marketing, and other overhead. Additionally, supermarkets must account for the costs of managing their supply chain, such as shipping and warehousing products.
• How do you get funding for your supermarket business plan? There are several ways to secure funding for a supermarket business plan. One of the most common methods is to seek out investors who are willing to provide capital. This can include both individuals and companies. It is important to clearly outline the potential return on investment for potential investors to attract their interest. Additionally, obtaining funding through loans from banks or other financial institutions may be possible. It is important to have a well-crafted business plan that demonstrates a viable path to profitability. Finally, government grants may be available in some cases, and they should be explored as a potential funding source.

Download Supermarket Business Plan in PDF

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than £1.5 billion in funding, and they can do the same for you.

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New Research Finds Supermarkets’ Business Model is on the Knife Edge

A new report from the Food Research Collaboration, based on analysis by Professor Lisa Jack from the University of Portsmouth, shows that the supermarkets’ business model is surprisingly fragile.

According to the report, a look at the research from the past 60 years suggests that the classic supermarket model of cheap prices doesn’t really work. Professor Jack’s investigation finds that the business model of supermarkets is on a knife edge: tiny and heavily protected profit margins applied to large volumes of goods keep the system running. Consumers benefit from a near endless array of cheap food, but the system is left in a balancing act that could easily go awry.

The new report,  The Secrets of Supermarketing: A Model Balanced on a Knife Edge , by Professor Lisa Jack from the University of Portsmouth’s Faculty of Business and Law, finds that adding scale actually adds to supermarkets’ expenses. In other words, supermarkets face the costs of running their businesses (stock, premises, IT systems, staff, enticing displays, sophisticated logistics), but need to keep prices down to remain attractive to consumers and keep them coming through the door. The supermarkets therefore keep prices low by enticing customers to buy additional items and by looking to their suppliers to keep costs down. Bargaining power is the one real advantage that size and scale give the supermarkets, but it risks putting financial and emotional burdens onto their suppliers.

Professor Jack, one of the few accountancy academics to focus on the food system, finds that one way supermarkets keep costs low is by charging suppliers fees for marketing and selling their products, generating commercial income which can equal or exceed supermarkets’ bottom line profits. Without the commercial income generated by charging supplier fees, British supermarkets would be running at or near a loss.

This supermarket model of low prices, wide choice, expert marketing, and slim margins, although finely balanced and expertly run at the supermarket end, risks unbalancing the rest of the food system. The supermarkets’ business model has unintentionally left us with a food system characterized by over-purchasing, over-eating, over-production, and waste, according to Jack. Food is transferred to store cupboards in consumers’ homes and then left unused; empty calories are stored in our bodies; and edible food goes into bins.

“Supermarkets have been fantastically successful by selling what are called ‘bundles of convenience’ to shoppers—low prices, convenience, and even entertainment,” Professor Jack said. “The purpose of my research is not to bash the supermarkets. But it does raise important questions about how such a finely balanced model can make the big changes that may be necessary—and are often demanded by campaigners—to achieve a more sustainable food system.”

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The Business Model Navigator, 2nd Edition by Oliver Gassmann, Karolin Frankenberger, Michaela Choudury, Michaela Csik

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Supermarket

Large selection under one roof

The pattern

In the Supermarket business model, a company sells a variety of readily available products and accessories all under one roof (WHAT?). The consciously wide range of products made available satisfies most customers’ desires and generates considerable demand (VALUE?). Prices are generally kept low to draw in customers, while economies of scope yield advantages to the company in terms of efficiency and product diversification (HOW?, VALUE?). Supermarkets are popular because customers typically like to be able to get everything they want or need under one roof (WHAT?).

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Supermarket Business Model Canvas

$15.00 $5.00 1 review

Instant Download, Editable on MAC & PC

Resources On Supermarket

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Description
• 1. Key Partnerships
• 2. Key Activities
• 3. Key Resources
• 4. Value Propositions
• 5. Customer Relationships
• 6. Channels
• 7. Customer Segments
• 8. Cost Structure
• 9. Revenue Streams

Introduction

In recent years, the online grocery and fresh produce delivery industry has seen immense growth. According to Statista, in 2020 the global online grocery industry is estimated to reach $162 billion, an increase from $21 billion in 2018. This rapid growth is attributed to an increase in consumer preference for convenience and convenience-oriented products and services.

The supermarket industry is also evolving to meet consumer demands and meet the need for convenience. A prime example of this is the supermarket's emergence of online groceries and fresh produce delivery services. This innovative service enables customers to make their grocery purchases conveniently and efficiently, without having to step out of their homes.

The present blog post is dedicated to the discussion of a business idea around an online supermarket that offers convenient grocery and fresh produce delivery services to customers. The business will partner with local farmers and suppliers to provide seasonal, fresh, and high-quality food items to customers and provide added value with weekly specials, discounts, and exclusive offers.

Supermarket Business Plan

$59.00 $39.00 DOWNLOAD

Key Partnerships

Key partnerships are collaboration and relationships with external entities that are a source of value to the business. They are essential for a successful Supermarket business as it gives access to various resources and enables efficient functioning.

• Local farmers and suppliers: Developing partnerships with local farmers and suppliers can provide the Supermarket with access to fresh produce and goods at competitive rates. These partnerships can also help the Supermarket access to goods that are specific to the locality.
• Delivery service providers: Developing relationships with reliable delivery service providers can enable the Supermarket to effectively handle logistics and offer delivery services to customers. Delivery service providers can also help track and manage orders efficiently.

Key Activities

Supermarkets have a number of key activities that add to their success, both in-stores and online. Key activities for supermarkets include:

• Maintaining customer-oriented service : Supermarkets need to ensure that customers have a positive experience when they enter the stores. This includes friendly and helpful customer service, clean stores, and organized merchandise displays.
• Providing access to fresh, seasonal produce : Supermarkets need to maintain a stock of fresh, healthy produce in order to attract customers. This includes partnering with local farmers and suppliers to ensure a reliable supply of fresh produce.
• Establishing quality partnerships with local farmers and suppliers : Quality partnerships with local farmers and suppliers allow supermarkets to provide customers with a wide selection of produce, as well as competitive pricing.
• Partnering with delivery service providers : Supermarkets need to partner with delivery service providers to offer customers convenient delivery services, such as online ordering and delivery.

Key Resources

A Supermarket's key resources include:

• Technology to power the online store
• Website to host the online store
• Ads and promotions to engage customers
• Market research to capture customer insights
• Expertise to ensure the quality of produce

Value Propositions

Supermarket will provide customers with a number of value propositions, which include:

• Convenience of online grocery and fresh produce shopping.
• Access to fresh, seasonal, and high-quality items.
• Weekly specials, discounts, and exclusive offers.
• Personalized customer service and care.

Customer Relationships

Providing customer support for inquiries and orders is an important part of running a successful supermarket business. Providing high quality customer service is one of the key ways to increase customer loyalty and repeat business.

The supermarket should have a dedicated customer service team that is available for inquiries, orders, and any other issues that customers may have. This team should also be responsible for responding to customer feedback and resolving any customer issues as quickly as possible.

Sending updates and promotional materials to customers is another way of engaging customers and keeping them interested in your business. This could include email newsletters, promotional flyers, and special offers. This is also an opportunity to show customers new products and services that the supermarket has to offer.

Creating loyalty programs, rewards, and discounts is also a great way to increase customer loyalty and repeat business. These programs are designed to reward customers for their continued patronage and should be designed in such a way that encourages customers to keep coming back to the supermarket.

Supermarkets have a number of marketing channels available for promoting their products and services. These could include:

• Online store - An online store can offer customers convenience, allowing them to buy groceries from the comfort of their own home.
• Social media channels - A strong presence on social media can help to create brand awareness and spread product information.
• Email campaigns - Targeted emails can help to reach out to existing and potential customers with offers and deals.
• Advertising campaigns - Traditional advertising methods such as television or radio spots can be used to reach a wider audience with an engaging message.

Customer Segments

The supermarket seeks to target three distinct categories of customers:

• Families : households with multiple family members looking for convenient and cost effective groceries.
• Single Professionals : individuals between the ages of 25-45 looking for fast, fresh, and convenient food with minimal clean-up.
• Students : young adults between the ages of 18-24 looking for affordable and easy meal solutions.

Cost Structure

Cost structure for a supermarket comprises of the following components:

• Technology and website development
• Marketing campaigns
• Delivery costs

Technology and website development are important components of running a successful supermarket, as they help to increase sales and improve customer experience. Personnel costs include salaries of staff and wages, as well as any training and development. Marketing campaigns help customers to be aware of the supermarket and attract new customers. Delivery costs include the expenses incurred in shipping orders to customers.

Revenue Streams

The Supermarket online business model canvas should include various revenue streams. These include:

• Sales from online store: The supermarket can generate revenue from the sale of products and services through its online store. This could include subscriptions for particular products, and the sale of packaged goods.
• Membership fees: To increase loyalty from customers, the supermarket can provide membership programs which customers can pay for. This membership could include discounts and exclusive access to certain deals and sales.
• Ads and sponsorships: Another source of revenue could come from the placement of ads and sponsorships on the supermarket's website. This could be done through a range of mediums, such as text, videos, and audio.
• Commission from delivery providers: If the supermarket chooses to offer delivery services, then they could charge a commission to delivery providers for using their services.

The creation of a Business Model Canvas for a Supermarket is a dynamic process which requires careful consideration at every step of the process. Ultimately, the goal is to identify meaningful strategies, and create a clear plan for implementation of the business model. Key aspects such as value proposition, customer segments, channels, customer relationships and revenue streams should be developed to build an effective canvas for the Supermarket. Moreover, this process should consider the competencies and capabilities of the Supermarket, its competitive environment, and the larger economic environment. Finally, by evaluating and validating the results of the Business Model Canvas, the Supermarket is better able to measure the viability and impact of the proposed business model and adjust as needed to ensure future success.

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December 16, 2021

New research finds supermarket business model is on knife edge

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07 Steps to Start a Supermarket / Hypermarket: Business Model Development

• Your Retail Coach

In order for a business to be successful, it is essential to develop a business model that describes how the business will generate revenue. As a basic concept, a business model provides information about a company’s target market and the needs of that market. It also provides information about the role that the company’s products or services will play in fulfilling those needs. An effective business model enables investors to gain insight into the operation of the company and identifies its competitive advantage. When we use the term business model it typically includes all the number crunching parts of the business. Let us discuss some of these terms which form the major part of the supermarket business model and try to understand them briefly.

• CAPEX – In business, capital expenditures are the costs that organizations or corporations incur for the purchase, maintenance, or improvement of their fixed assets, interior cost, racking, cost budget for software and hardware, etc. 
• Operating cost-  An operating expense is what a business spends on activities that aren’t directly related to its primary activity. They cover expenses associated with running the business such as salaries, rentals, and marketing costs in the case of eCommerce. It is advisable to thoroughly analyze these factors in order to operate with affordability.
• Products – Choosing the categories of products may sound a daunting task. Analyze your competitor’s shelves, and always look for products that lacks in the market. Supermarket stores generally sell groceries, fresh produce, meat, bakery and dairy products, and non-food items as well. Always keep a balance between the variety of brands considering the reputation in the minds of customers as well as your margin.
• ROI – The return on investment (ROI) is a performance measure used to evaluate an investment’s efficiency or profitability. It is better to plan before how you intend to recover your cost and further boost sales to generate better ROI. In supermarkets the margins are low so it is important to cut operating costs and opt for multiple sales channels and diversify your products for maintaining anoptimum ROI.
• Breakeven Sales –  When sales equal expenses in a retail business, you have reached break-even. In a break-even situation, there is neither profit nor loss. Breaking even is the key to “cash flow” for a supermarket or any business. Marketing can play a crucial role in customer retention and getting new customer to reach your break even point.
• Margins –  An item’s retail margin can be defined as the difference between the price at which you pay for it and the price at which you sell it. Due to slim profit margins, supermarket owners should plan and develop their business models accordingly. For instance, choose the right place with the right rentals or look for products that are not available at existing stores and there is a scope for demand.
• Budgeting – A retail budgeting process is important not only for planning the purchases of merchandise in the proper quantities but also for estimating the costs associated with the business and the revenue required to cover them. As a starter it t is advisable to allocate a proper budget for every department associated with the supermarket business while keeping the idea of scalability in mind.

Entering the supermarket industry without a proper business model is like playing the game of darts in the dark. If you lack it you are sure to fail. While developing the plan make sure you have a business plan for at least five years and the sales projection for at least the next three years. Having a roadmap is always crucial in each and every business.

Why Choose YRC

YRC, Your Retail Coach is a multidisciplinary consulting firm specializing in the retail & eCommerce industry with a commitment to delivering a blend of growth, innovation, and sustainability to our clients. For more information about our retail and eCommerce consultant services , go through the below-mentioned links:

Retail & E-commerce Vlogs: https://www.youtube.com/c/YOURRETAILCOACH

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Link to the video description of the above content:

Refer to more articles from series: 

?Click on the Link  [For Step 1 ] : Business Model Development: https://youtu.be/biawpmxX4ds

?Click on the Link  [For Step 2 ] : Product Categories Finalization: https://youtu.be/nLylodwRGZA

?Click on the Link  [For Step 3 ] : Organisation Structure: https://youtu.be/N1GQ66fFWNw

?Click on the Link  [For Step 4 ] : Systems & Processes: https://youtu.be/E-SftiDBiA0

?Click on the Link  [For Step 5 ] : Layout Planning: https://youtu.be/RZaLw8TFaBE

?Click on the Link  [For Step 6 ] : Software Implementation: https://youtu.be/LyNz8kOuHxw

?Click on the Link  [For Step 7 ] : Process & Soft-skills training: https://youtu.be/bD6V5vPMeRs

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