You need a minimum of $184,230 CAD to open a grocery store in Canada. This amount includes staff salaries for the first 3 months of operation Grocery stores are known to sell food and other household items. They can be called supermarkets, these stores are go-to sources for a home’s food needs.
They also sell important kitchen utensils, disposable items, cleaning materials, candy, alcohol, soft drinks, and other self-care items. Today’s grocery stores are great resources for many products, making them important local resources. In this article, we will help you with the estimated cost of opening a grocery store business in Canada.
The Estimated Cost of Opening a Grocery Store in Canada
When starting a standard grocery store in Canada, you are expected to spend the bulk of the start-up capital on leasing a storage facility in an ideal location, stocking the store with a wide range of groceries, and of course, equipping the facility. The exact cost of opening a grocery store depends on the size of the grocery store and where it will be located.
Aside from that, you are not expected to spend much except for paying your employees and utility bills. These are the key areas where you are expected to spend your start-up capital on;
- The total fee for registering the business in Canada – $350 (CAD)
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the grocery store in Canada in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring a business consultant – $2,500.
- Insurance (general liability, workers’ compensation, and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $53,300.
- The cost for facility remodeling (construction of racks and shelves) – $5,000.
- Other start-up expenses include stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $20,000
- The cost of equipping the grocery store – $25,000
- The cost for start-up inventory (a wide range of groceries) – $65,000
- Storage hardware (bins, rack, shelves, jewelry case) – $3,720
- The cost for store equipment (cash register, security, ventilation, signage) – $3,750
- The cost for the purchase of furniture and gadgets ) – $4,000
- The cost of launching a website: $600
- The cost for our opening party: $3,000
- Miscellaneous: $5,000
From the rough estimate listed above, you would need a minimum of one hundred and eighty-four thousand two hundred and thirty CAD ($184,230) to establish a medium-scale but standard grocery store in any city in Canada. This amount includes the salaries of all the staff for the first three months of operation.
Note that this is a rough estimate and we usually advise our readers who are interested in starting a grocery store in Canada to contact wholesalers and suppliers of the types and brands they want to retail in their grocery store in order to get the real-time prices of these items. The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed earlier and yet successfully start a world-class grocery store in Canada.
Factors That Will Influence The Cost of Opening a Grocery Store In Canada
The Type of the Grocery Store
A major factor that will determine the overall cost of opening a grocery store in Canada is the type of grocery store the owner of the business wants to open. There are brick-and-mortar grocery stores and online grocery stores. If you want to start a grocery store in Canada that is running from a brick-and-mortar facility, you are going to spend more when compared to a grocery store in Canada that is strictly online (operating from an eCommerce store).
The Choice of Location
Another major factor that will determine the cost of opening a grocery store in Canada is the location. In business, location is a key part of what determines the success of a business. There are business consultants and realtors who are specialized in helping people choose an ideal location for their business; a location that will guarantee them profitability and break even within the shortest time frame.
Location can influence the cost of starting a business not just in Canada but in other parts of the world. For example, renting or leasing a storage facility in a location that is off the city center or off a major road will be less expensive when compared to renting or leasing a grocery store facility in a highbrow area.
The Required Licenses and Permits
You cannot open a grocery store in Canada without first applying for a mandatory license and permits. You would need an operational license, building license, zonal permits, signage permits, and reseller permits amongst others that may be unique to different cities and states. These licenses and permits cost a lot of money and it will influence the overall costs of opening a grocery store in Canada.
There may be other inspections you must pass before you can be issued your licenses and permits to start operation, and this will cost money. In order to get the overall costs of licensing and permits associated with opening a new grocery store, you should reach your provincial government to find out what you need for your store. You will also need to consider council and federal requirements.
The Type of Facility
The type of facility you want to operate your grocery store from is another major factor that will determine the overall costs of opening a grocery store in Canada. As regards the facility, you have the options of renting, leasing or designing and constructing your own storage facility from the scratch. With renting and leasing a shop facility, you might just have to spend extra cost to modify the shop facility to fit into what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.
If you want to construct your grocery store facility from the scratch, you will buy the land or property, bring up your design and construct and equip the grocery store facility to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a grocery store facility in a low-traffic area.
The Size of the Grocery Store
Another important factor that will determine the cost of opening a grocery store in Canada is the size of the grocery store. Of course, the larger the grocery store, the larger the budget to get it up and running especially as it relates to furnishing and equipping the store facility.
Aside from the cost of furnishing and equipping the store facility, it will also cost you more to position employees to man different job positions in the grocery store facility and this will translate to spending money to open the grocery store. For example, less than a handful of employees can man a grocery store that is in a 10 by 10 facility while it will take about a dozen employees to man a grocery store that is in a 20 by 20 facility.
The Cost of Hiring and Paying a Business Consultant and Attorney
If you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney. A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, SWOT analysis, and other advisory services that will help you with opening the business.
So also, an attorney will help you with registering the business, drafting contract documents (especially for your suppliers and creditors), and offering you all the legal expertise that will help you start the business on the right foundation. Of course, you will agree that these services will cost you money and it will indeed influence the overall cost of opening a grocery store in Canada.
The Cost for Branding, Promotion, and Marketing of the Grocery Store
The cost of branding, promoting, and marketing the grocery store is another key factor that will determine the overall cost of opening a grocery store in Canada. Trust me, if you want to win a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion, and marketing of your new grocery store.
It is not cheap to come by an expert in branding, promotion, and marketing that will help you compete with brands that are already determining the market direction of the grocery stores industry in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your store in Canada.
The Cost for Furnishing and Equipping the Grocery Store in Canada
Another factor that will determine the cost of opening a grocery store is the cost of furnishing and equipping the store facility. You should make a budget for stuff like; storage hardware (bins, rack, shelves, case), shopping baskets and trolleys, counter area equipment, Flat Screen TVs, sound system, Satellite dish and decoder, furniture (table, and stools), telephones, filing cabinets, store equipment (cash register, POS machines, security, CCTV, ventilation, signage), and security and fire alarms and prevention gadgets amongst others.
The Cost for Insurance
The cost of paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a grocery store in Canada. Interestingly, in Canada and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your own grocery store in Canada.
The Cost for Registering the Business
Registering a grocery store is another cost that will influence the overall costs of opening a store. Although the cost of registering a business is quite affordable, it will no doubt add to the overall costs of opening a business.
Source of Your Supplies
Another major factor that will determine the cost of opening a grocery store in Canada is the source of your supplies. If you get your supplies from a cheaper source, it will help bring down the cost of starting the business.
If you are able to build a robust business relationship with some of the leading fruits and vegetable farmers, fresh and frozen meat suppliers, dairy products, beverages (including alcohol), food items, non-food items, and drugs and health products manufacturing companies, then you would have succeeded in cutting down the cost of your supplies. As a matter of fact, you can even get your supplies on credit.
Cost of Recruiting and Training Your Staff
The fact that you are opening your grocery store as a new business means that you are expected to recruit and train your staff to conform to the kind of grocery store you want to operate. The training will help you sell the corporate culture of your organization to the new employees. It will cost you money to hire expert trainers that will help you train your new employees.
The Cost for the Purchase and Customizing of Uniforms
Another factor that will determine the overall cost of opening a grocery store is the cost of the purchase and customizing of uniforms. Sales boys and girls, front desk/payment attendants, and security personnel all have different uniforms. All these uniforms will cost you money which is why they must be part of your budget.
The Cost for Grand Opening of the Grocery Store in Canada
No grocery store in Canada opens its business without first organizing an opening party to officially launch the business. This means that the cost of the grand opening party is part of the factors that will determine the overall cost of opening a grocery store. You can do a soft opening if you are operating on a low budget or you can go for a grand opening party. The bottom line is that it is a cost that must be part of your budget and this cost will influence your overall costs.
Note that there are other factors not listed above that will surely influence the overall cost of opening your grocery store in Canada which is why we advise that you work with a result-driven business consultant to help you find out the unique factor in your location that can influence the overall cost of opening your grocery store in Canada.