Grocery Stores are stores that retail food and other household items. Please note that a grocery store can also be called a supermarket. They also sell important kitchen utensils, disposable items, cleaning materials, candy, alcohol, soft drinks, and self-care items.

Available statistics have it that as of December 2020, there were 15,344 grocery stores in Canada, and the market size measured by revenue of the Supermarkets & Grocery Stores industry in Canada, is $99.1 billion CAD in 2022. The market size of the industry in Canada is expected to increase 0.9% in 2022. Micro grocery stores which employ between one and four employees, were the most widespread type of grocery store in Canada.

There are 5,627 micro grocery stores located across Canada at this time. Independent food retailers also play a key role in the Canadian supermarket industry, as there are around 6,816 unaffiliated independent food stores in Canada, compared to only about 2,518 supermarket chain locations.

Steps on How to Start a Grocery Store Business in Canada

  1. Conduct Market Research

If you are considering starting a grocery store business in Canada, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your grocery store business in Canada should be to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source for information that will help you maximize your business, give you reliable data and a hint of what your potential market will be looking for from a grocery store business and also to help you operate your grocery store business in Canada with less stress.

a. Who is the Target Market for Grocery Store?
  • Boarding houses
  • Guest houses
  • Hotels
  • Restaurants
  • Households
  • Everyone who resides in the location where you intend opening your grocery store.
b. Is Grocery Store a Profitable Business?

Yes, the grocery store business in Canada is very profitable. As a matter of fact, the industry is worth an estimated 99.1 billion CAD and year-over-year change in sales of supermarkets and grocery stores in December in Canada was 14.6 percent.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to grocery store business in Canada because grocery store business is a niche idea in the food retailing industry.

d. Who are the Major Competitors?
  • Loblaw Companies Limited
  • Sobeys Inc.
  • Metro Inc.
  • Safeway
  • Walmart
  • Real Canadian Superstore
  • No Frills
  • Canadian Tire
  • Food Basics
  • FreshCo
  • Zehrs
  • Foodland
  • Save on Foods
  • Fortino’s
  • London Drugs
  • Atlantic Superstore.
  • Extra Foods
  • Bloor Street Market.
  • Dominion
  • The Barn Fruit Markets
  • Les Entrepôts Presto.
e. Are There County or Provincial Regulations or Zoning Laws for Grocery Store?

Yes, there are county and provincial regulations and zoning laws for grocery stores in Canada. Please note that zoning allows local governments to regulate which areas under their jurisdiction may have real estate or land used for particular purposes. Examples of zoning classifications include residential, commercial, agricultural, industrial, or hotel/hospitality, among other more specific designations.

f. Is There a Franchise for Grocery Stores?

Yes, there are franchise opportunities for grocery stores in Canada. Here are some of them;

  • Walmart
  • Loblaw Companies Limited
  • Shefield Express
  • Circle K Franchise
  • Buck or Two Plus!
  • Hyper Supermarket
  • Batala Supermarket
  • Big Mart
  • Marche Ricxman
  • Truemart Supermarkets.
g. What Do You Need to Start a Grocery store business in Canada?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good Shop facility
  • Goods and Services Tax/Harmonized Sales Tax (GST/HST)
  • A Corporate Bank Account
  • Supplies of different types and brands of groceries
  • Employees
  • Startup Capital
  1. Memorable Canadian Grocery Store Business Names

  • Justin Blakes© Grocery Store, Inc.
  • Food Court® Grocery Stores
  • All Nations© Grocery Store, Inc.
  • Uncle Sam® Grocery Store, Inc.
  • Full Mart™ Grocery Store, Inc.
  • The Games™ Grocery Stores
  • Spark Light© Grocery Stores
  • Grocery Delight® Grocery Store, Inc.
  • Gateway© Grocery Store, Inc.
  • Super Bowl© Grocery Store, Inc.
  • Red Mart® Grocery Stores
  • YES! ® Grocery Stores
  • Likeable™ Grocery Stores
  • WoW Stores© Grocery Store, Inc.
  • Food Tunes® Grocery Store, Inc.
  • Saddle Valley™ Grocery Store, Inc.
  • Shoppers™ Grocery Store, Inc.
  • Valentine© Grocery Store, Inc.
  • Green Mart® Grocery Stores
  • The Horizon™ Grocery Store, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Grocery Store?

When it comes to starting a grocery store business in Canada, you have four options when it comes to the business structure to choose from, but the one that most players in this line of business consider is a corporation. It is common to consider a corporation because it comes with limited liability – owners are not responsible for company debts or obligations.

It is also easier to raise capital from investors or financial institutions. Besides, being incorporated is often a requirement when doing business with governments or other businesses, and business income can be paid out in the form of salary or dividends, allowing you to optimize your tax situation.

Please note that all businesses in Canada must register their business names in their respective provinces or territories except for sole proprietorships that use only the owner’s legal name with no additions (except in Newfoundland and Labrador where no sole proprietorships or partnerships need to register their names).

b. Steps to Form a Business in Canada
  • Choose a Name for Your Business.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Grocery Store?
  • General Business License
  • Health and Safety Permit
  • Food and Drinks Handlers’ License
  • Zonal Permits
  • Signage Permit
  • Operational State Facility Inspections.
d. What Type of Certification is Needed to Open a Grocery Store?

You don’t need any certifications to open a grocery store business in Canada.

e. What Documents are Needed to Open a Grocery Store?
  • Certificate of Incorporation
  • Goods and Services Tax/Harmonized Sales Tax (GST/HST)
  • Business and liability insurance
  • Council Permit and Building Approval
  • Business License
  • Business Plan
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering opening a grocery store business in Canada, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Grocery Store Business in Canada?

The cost required to open a grocery store business in Canada may vary significantly. But a medium scale grocery store typically costs between 100,000 CAD and 500,000 CAD to set up.

b. What are the Costs Involved in Starting a Grocery Store?
  • Business Registration Fees – $7,500 CAD
  • Legal expenses for obtaining licenses and permits – $3,300 CAD
  • Marketing, Branding and Promotions – $1,000 CAD
  • Business Consultant Fee – $2,500 CAD
  • Insurance – $2,400 CAD
  • Rent/Lease – $75,000 CAD
  • Other start-up expenses like phone and utility deposits ($1,800).
  • Operational Cost (salaries of employees, payments of bills et al) – $30,000 CAD
  • Start-up Inventory – $65,000 CAD
  • Store Equipment (cash register, receipt issuing machines, POS, security, ventilation, signage) – $5,750 CAD
  • Shopping Carts, Shopping Baskets and – $5,000 CAD
  • Website: $750 CAD
  • Opening party: $3,000 CAD
  • Miscellaneous: $2,000 CAD
c. What Factors Determine the Cost of Opening a Grocery Store?
  • The size of the grocery store
  • The choice of location
  • The required licenses and permits
  • The type of facility (shopping mall, independent stores)
  • The type of groceries retailed in the shop and additional service
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing of the grocery store
  • The cost for furnishing and equipping the grocery store
  • The cost for insurance policy covers
  • The cost for registering the business
  • Source of your supplies and ongoing expenses
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost for the grand opening of the grocery store business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your grocery store, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Grocery Store?
  • Supplies (inventory expenses)
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Rent
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer – $70,000 CAD Per Year
  • Shop Manager – $45,000 CAD Per Year
  • Merchandise Manager – $38,630,000 CAD Per Year
  • Cashier – $30,630,000 CAD Per Year
  • Sales Boys and Sales Girls – $27,100 CAD Per Year
  • Cleaners – $25,000 CAD Per Year
  • Security Guard -$24,000 CAD Per Year
g. How Do You Get Funding to Start a Grocery Store?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations, and angel investors
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Green Mart® Grocery Stores, Inc. is a standard grocery store that will be located in one of the busiest streets in Charlottetown, Prince Edward Island. We have been able to lease a facility that is big enough (a 15 thousand square foot facility) for the kind of grocery store we intend launching and the facility is located in a corner piece property directly opposite the largest residential estate in Charlottetown.

b. Products and Service
  • Fruit and vegetables
  • Fresh and frozen meat
  • Dairy products
  • Beverages (including alcohol)
  • Frozen foods
  • Other food items
  • Other non-food items
  • Drugs and health products
c. Mission Statement

Our mission is to establish a grocery store business in Canada that will make available a wide range of goods and products from top manufacturing/production brands at affordable prices to residents of Charlottetown, Prince Edward Island, and other cities where we intend opening our chains of grocery stores.

Vision Statement

Our vision is to build a grocery store business in Canada with franchises all across Canada.

  1. Goals and Objectives

The goals and objectives of a grocery store business in Canada are to retail different types of groceries to consumers.

d. Organizational Structure
  • Chief Executive Officer
  • Shop Manager
  • Merchandise Manager
  • Cashier
  • Sales Boys and Girls
  • Cleaners
  • Security Guard

Marketing Plan

a. SWOT Analysis
Strength:
  • Ideal location for a grocery store business in Canada
  • Highly experienced and qualified employees and management
  • Access to finance from business partners
  • Access to wholesale supplies of different types of groceries.
Weakness:
  • Financial constraints may restrict the publicity and branding of the business
  • A new business that will be competing with well-established grocery stores and franchises in the city.
  • Inability to retain our highly experienced employees longer than we want during the teething stage of the business.
Opportunities:
  • Low revenue volatility
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • Shoplifting tendencies
  • The arrival of a new grocery store within our market space
  • Steady wage expenses
  • Economic uncertainty
  • Liability problems
  • The government could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
b. How Do Grocery Stores Make Money?

Grocery stores make money by selling the following products;

  • Fruit and vegetables
  • Fresh and frozen meat
  • Dairy products
  • Beverages (including alcohol)
  • Frozen foods
  • Other food items
  • Other non-food items
  • Drugs and health products
  • Franchise
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your grocery store business by sending introductory letters alongside your brochure to guest houses, hospitals, restaurants, households, and other key stakeholders throughout the city where your grocery store is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your products.
  • Join local grocery store associations for industry trends and tips
  • Provide discount days for your customers
  • Advertise our business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

There is no uniform price for groceries because different groceries come with their own price.

b. How Much Profit Do Grocery Store Owners Make a Year?

It depends, but the available report shows that on average, grocery store owners make anywhere from $60,000 up to around $300,000 or more. Location, size of store & whether it is a franchise affect pay range the most.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the grocery store
  • The types of groceries retailed in the shop
  • The location of the grocery store is covering
  • The management style of the grocery store
  • The business approach of the grocery store
  • The advertising and marketing strategies adopted by the grocery store.
  • The number of years the grocery store is in business
d. What is the Profit Margin of a Grocery Store?

Conventional grocery stores make between 1 to 2 percent bottom-line profit, but stores like Whole Foods Market may generate between 5 to 12 percent profit. For small independent grocery stores, 1 to 4 percent is more typical. There are also a lot of factors that affect independent owners more, such as marketing, product costs and shrink.

e. What is the Sales Forecast?

Below is the sales forecast for a grocery store. It is based on the location of the business and other factors as it relates to such startups in Canada;

  • First Fiscal Year: $340,000 CAD
  • Second Fiscal Year:  $450,000 CAD
  • Third Fiscal Year: $750,000 CAD
  1. Set Up your Shop

a. How Do You Choose a Perfect Location for Grocery Store?
  • The demography of the location
  • The demand for groceries in the location
  • The purchasing power of residents of the location
  • Accessibility of the location
  • The number of grocery stores, and retail outlets that sells groceries in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What Provinces and Cities are Best to Open a Grocery Store?
  • Toronto, Ontario
  • British Columbia, Vancouver
  • Calgary, Alberta
  • Quebec City, Quebec
  • Charlottetown, Prince Edward Island
  • Saskatoon, Saskatchewan
  • Nova Scotia, Halifax
  • Manitoba, Winnipeg
c. What Equipment is Needed to Operate a Grocery Store?

You will need trolleys, shopping baskets, computers and receipt issuing machines, a sound system (for playing music), and Point of Sale Machines (POS Machines).

  1. Hire Employees

When it comes to hiring employees for a standard grocery store, you should make plans to hire a competent shop manager (you can occupy this position), merchandise manager, account clerk or cashier, sales boys and sales girls, cleaners, and security guards.

  1. Launch the Business Proper

In recent times, no grocery store opens its door for business without first organizing an opening party to officially launch the business. You can choose to 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 with a proper launching of the grocery store, you will officially inform people in your city that your grocery store is open for business.

a. What Makes a Grocery Store Business in Canada Successful?
  • Choose a good location and shop facility to launch the business
  • Make sure your shop is stocked with different types of groceries (give your customers options)
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your grocery store business
  • Leverage on all available online and offline platforms to promote your grocery store business
b. What Happens During a Typical Day at a Grocery Store?
  • The shop is open for the day’s work
  • The groceries are properly arranged
  • Walk-in customers are attended to
  • Deliveries of orders are made
  • Stocks are taken and reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Grocery Store?
  • Excellent sales and marketing skills
  • Excellent customer services skills
  • Interpersonal skill
  • Accounting and bookkeeping skills
  • Business management skills
  • Bargaining skill
  • Work experience in a shop environment
  • Experience in managing people
  • Experience in business administration.