GROCERY STORE BUSINESS PLAN

GROCERY LOUNGE
3307 32 Avenue, Vernon, British Columbia
1. EXECUTIVE SUMMARY
Grocery Lounge will be located in the 3307 32 Avenue, Vernon, British Columbia. This
business plan is prepared to start small scale grocery store in the amount of $1,00,000, to begin
work on site Renting and modifications, purchase equipment, product inventory and to cover
expenses in the first year of operations.
Grocery Lounge will be incorporated initially as a corporation. Owner Asif Khan will contribute
$1,00,000 towards this business venture.
Small grocery stores are trendy among the peoples, despite the expansion of large chain
supermarkets. They are especially relevant in small towns and villages where they may be the
only place to buy food.
The capital contributions from the owner, will allow our store to successfully open and maintain
operations through the year. A large initial investment of $100,000 will allow our store to
provide its customers with a fully featured grocery store. A unique, upscale, and innovative
environment is required to provide the customer with an atmosphere that will inspire continued
use. The successful operation of year one will provide our store with customers that will allow it
to be self-sufficient in year two.
Grocery Lounge is the convenience store of the 21st Century, fulfilling a need that will continue
to exist into the future. Grocery Lounge will be the first fully automated, with 24-hour Vending
machines that is more like an enormous dispensing machine than the traditional store. We are
living in an age where unique grocery store environments are in great demand. Our store will
differ from the traditional grocery store because of our added personal touch.

1.1 OBJECTIVES
As a leading wholesale distributor, our commitment is to provide quality products and services in
a cost-effective manner, enabling Grocery Lounge retailers to excel in serving their customers.
Objectives of Grocery Lounge store are:

 A clean environment in which to shop

 A safe place to shop
 Value
 Great, friendly services
 Our shop will be good neighbors and will be involved in the community
 Our store will be at least 4,100 square feet
 Store will have minimum weekly retail sales of $10,000 which is equivalent to
approximately $5,000 of purchases weekly at the wholesale level
1.2 MISSION
Our most fundamental philosophy is the concern for people. This strong belief in people is the
determining factor that motivates our operations in developing our relationship with our
employees and customers.
We believe that our responsibility for customer satisfaction is not focused solely on the sale of a
product, but rather is the total relationship a customer experiences when interacting with our
organization. We believe in honesty and truth in all transactions and in providing products of the
highest quality and at fair prices. We should do everything possible to provide outstanding
service in marketing the products we sell.
We at Grocery Lounge are committed to bringing you the best all-around shopping experience.
Our nice pledge campaign includes an intense training session for all of our employees, and a
firm understanding and commitment to deliver these pledge points at the Grocery Lounge.
1.3 DEMOGRAPHY
According to 2016 Vernon census report, total population is 38,825. Below is the ethnic origin of
people from Williams Lake

Visible minority group Population % of Total Population

South Asian 730 1.9%
Chinese 380 1%
Black 105 0.3%
Filipino 335 0.9%
Latin American 155 0.4%
Southeast Asian 185 0.5%
West Asian 50 0.1%
Korean 85 0.2%
Japanese 265 0.7%
Total Aboriginal 2,795 7.2%
population
European 33,625 86.6%
Total population 38,825 100%
2. COMPANY DESCRIPTION
Grocery Lounge will be located in the 3307 32 Avenue, Vernon, British Columbia. The
restaurant will be wholly owned and operated by Asif Khan.
The store will be open 7 days a week with hours as follows:

Monday: 7:00 a.m. to 10:00 p.m.

Tuesday: 7:00 a.m. to 10:00 p.m.
Wednesday: 7:00 a.m. to 10:00 p.m.
Thursday: 7:00 a.m. to 10:00 p.m.
Friday: 7:00 a.m. to 10:00 p.m.
Saturday: 7:00 a.m. to 10:00 p.m.
Sunday: 7:00 a.m. to 10:00 p.m.

2.1 Main competitors

Following are the nearby existing grocery/ convenience store:
Store Name Store Location
Charlie's Grocery 3801 32nd Ave, Vernon, BC
Simply Delicious Natural and 3419 31 Ave, Vernon, BC
Gourmet Market
Safeway Vernon Square 4300 32 St, Vernon, BC
Olive Us Olive Oil and Vinegar 3003A 30th Ave, Vernon, BC
Tasting Room
FreshCo 30th Ave & 34 St 3417 30th Ave, Vernon, BC
Happy Days Food Store 2409 39 St, Vernon, BC

2.2 Incentives to attract customers

 Offer extra reward points/ cash
 Offer discount on bulk or next purchase
 Offer free sample products
 Reward customers on individual level
 Membership (loyalty program)
 Promotional items
 Cash back
  Free delivery within 5Km radius
 Rebate
2.3 Location and facility
We have located the ideal location for our operation. Our store will be located at 32 Avenue,
Vernon, British Columbia. This site will contribute to our success due to being formally used
as a grocery store.
Total area of grocery store is 4,100 square feet. Monthly rent of the facility is 2100 CAD per
month and 25,200 CAD per annum. Our store will also have Atm machine for convenience of
customers
2.4 Inventory
Family name Quantity Unit
Grains
Wheat 150 lbs.
Flour 25 lbs.
Corn meal 25 lbs.
Oats 25 lbs.
Rice 50 lbs.
Pasta 25 lbs.
Total grains 300 lbs.
Fats and Oils
Vegetable oil 25 gal
Mayonnaise 15 lbs.
Peanut butter 15 lbs.
Salad dressings 05 lbs.
Total fats 60 lbs.
Legumes
Kidney beans 30 lbs.
Soy beans 25 lbs.
Lentils 20 lbs.
Chickpeas 30 lbs.
Total legumes 105 lbs.
 Sugar
Honey 20 lbs.
Sugar 30 lbs.
Brown sugar 30 lbs.
Corn syrup 20 lbs.
Total sugars 100 lbs.
Dairy
Dry milk 40 lbs.
Evaporated milk 20 can
Eggs 40 lbs.
Total diary 100 lbs.
Cooking essentials
Baking powder 20 lbs.
Baking soda 20 lbs.
Yeats 15 lbs.
Salt 30 lbs.
Vinegar 25 gal
Spices 20 lbs.
Total cooking essentials 130 lbs.

2.5 Start-up summary

Start-up costs will be financed through owner investment. The start-up chart shows the
distribution of financing.
Start-up Expenses Amount Start-up Expenses Amount
Site renting (1 year) $25,200 Software and Hardware’s $2000
Renovation $1,500 Carts or baskets for $5,000
customer use
Credit card $250 Shelves and display cases $7,400
processing machine for displaying items
 Expensed $5,000 Inventory products $40,000
equipment
Vending machine $8,000 Security system $650
Atm machine $5,000
Total expenditure $100,000

3. STORE OPERATION
Retail operations can encompass everything about how a store operates each day. These six
sections provide a more detailed overview of responsibilities that may fall under the field of
retail store operations:

 Design
 Customer Service
 Cash, Fraud, and Internal Controls
 Product Inventory
 Administration
 Store Management

3.1 Store Design Responsibilities

Store design responsibilities include store location, store design and layout, different departments
for product within store, visual display and proper signage

3.2 Customer Service Functions

Much of a store’s success depends on customer service - how it treats its customers. Customers
may not always be right, but they are always the customer, representing a potential sale and
potential review. With excellent customer service, stores can increase their competitiveness, and
even make up for shortfalls in other areas, such as convenience or pricing. Positive, personalized
customer service can help the small stores compete against the big stores.

Returns and refunds are another vital area of customer service. A store buys faith and loyalty
with customers when it handles returns easily and without hassle. Customers want to know that if
they make a mistake with a purchase, the store will not penalize them. Stores should also
carefully track returns to understand patterns and resolve problems.
3.3 Cash, Fraud, and Internal Control Functions

Stores need to carefully define, implement, and monitor these areas of their operations, as they
directly affect the bottom line
 Handling cash and credit
 Shoplifting and fraud prevention
 Stores develop and maintain internal controls, or standard operating procedures, to
prevent problems with cash handling, credit, shoplifting, and fraud
 Stores try to ensure that their employees and customers are safe. They may use security
guards and security camera monitoring.

3.4 Product Inventory Responsibilities

For a store to succeed, it needs to have the products to satisfy its customers. This is the fourth
area of retail operations: inventory management. Stores do their best to balance supply and
demand for products in a constant cycle of selling and restocking. If a product does not move
well, it is replaced with something that does. If a product does sell well, the store increases its
inventory.
These functions fall under inventory management
 Ordering merchandise
 Receiving stock
 Using an inventory system
 Pricing
 Merchandise handling
3.5 Retail Administration Responsibilities

These functions fall under administration, the fifth major area of operations.
 Maintain the store in good working order. Make sure customers aren’t turned off by
inadequate facilities or poor maintenance.
  Employee training is essential, especially given the frequent turnover in retail jobs.
Employees must be trained in customer service and store procedures, such as cash
handling and internal controls.
 Stores rely on promotions and sales to drive additional business.
 Data management and use of technology
4. MARKET ANALYSIS
By household size, grocery spending ranges from an average of $120 per week in two-person
households to $210 per week in households of five or more. Per-person spending is inversely
correlated with household size: per-person weekly expenditures are only $45 in households with
five or more members but $58 in one-person homes, according to the Food Marketing Institute.
Following factors directly or indirectly effects wholesale grocery/ continence store market
4.1 Target market strategy
Our store will meet the grocery needs of the surrounding neighborhood of minorities as well as
native people
We will reach our consumers by taking full advantage of Grocery Lounge single clearinghouse
for manufacturers' coupons, manufacturers' in-ad coupons, and warehouse damage coupons. Our
redemption programs will include Grocery Lounge gift certificates, selling-show vouchers, and
mail-in rebates. Other services include the Grocery Lounge Gift Certificate program, in ad
coupon redemption, and scan-down service to manufacturers and brokers.

4.2 Technology: electronic marketing

Grocery Lounge is committed to keeping up with technology changes, thereby gaining a
competitive edge in the marketplace. Computers and other information systems are integrated to
provide management information and timesaving tools.
These include:

 E-mail systems
 Standard accounting software
 Computer-based training

4.3 Promotions

Building store traffic, generating consumer excitement, accelerating sales and profits, and
positioning our store competitively in the market will be relatively simplified by the use of the
Sales Promotions. By combining the purchasing programs with trendsetting insight, Grocery
Lounge will create over 100 profit-generating retail promotions each year. Grocery Lounge
retailers select those promotions that best meet their unique marketing needs.

4.4 Competition

Marketed at a lower shelf price than national brands, Grocery Lounge products give their
retailers a competitive advantage. Grocery Lounge backs their products with year-round
promotional support including a big fall and early spring sale.
The store will be in walking distance of area shoppers, whereas the next nearest grocery store is
10 blocks from our store location.
4.5 Community service
Our store will serve community by giving out products to different religious places (mosque,
gurdwara, church) before 3-4 days of expiry of products as a good will gesture.
4.6 Lottery tickets scheme
Lottery sales can be an impulse purchase made by customers who come into our store for
something else. Others may come in specifically for lottery tickets. Our store offer interesting
lottery scheme for our valuable customers .

4.7 Strategy & implementation

We realize the success of Grocery Lounge will have to be achieved by doing more that serving
great products, and providing friendly service. We will utilize a marketing plan to build customer
traffic. We will continually strive to win more customers by being proactive rather than reactive
in our marketing efforts and stay current with popular industry trends.

Swot analysis

STRENGTHS OPPORTUNITIES
• A new, innovative product or • A developing market such as the
service. Internet.
• Location of our business. • Mergers, joint ventures or strategic
• Quality of our products. alliances.
• Loyal customers. • Little barriers to entry allows for
• Parking facilities immediate business opportunities

WEAKNESSES THREATS
• Lack of marketing expertise. • Rising operating costs
• Recruiting and retaining quality • Building/maintaining sales volume
employees • Business competitors
5. MANAGEMENT

People are our most valuable asset and Grocery Lounge provides a complete line of human
resource services designed to help us develop the greatest potential from our associates. The
people we employ are also a major investment in our company. It is their goal to help us fully
capitalize on this investment. Staff is highly experienced in the retail supermarket industry and
familiar with its unique problems and opportunities.
Our store will hire one Manager (owner), one Cashier, One Laborers/ Stockers. Our Store
Manager will have a college degree and several years of experience with managing a retail store.
Basic salary of cashier (Canadian national) will be $14 CAD per hour, laborers salary will be
$10 CAD per hour.

6. FINANCIAL PLAN

6.1 Startup cost

The estimated startup cost of Grocery Lounge store is $100,000. All the costs are mentioned
above in startup summary

6.2 Source and use of funds

Total start-up costs are estimated to be $100,000. The majority of the costs are associated with
the renting site for grocery store, product inventory and store equipment. Owner Asif khan will
contribute $1,00,000 to startup small grocery store.

Source of funds Amount

Owner Investment $1,00,000

Use of funds

Site renting (1 year) $25,200

Inventory products $40,000
Store Equipment’s (carts, shelves etc.) $20,000
 Vending and atm machines $13,000
Total use of funds $1,00,000

6.3 Inventory Turnover Ratio Calculation

By household size, grocery spending ranges from an average of $120 per week in two-person
households = $120 x 4 = $480 per month

Out of 38,825 Population, our aim is to attract at least 15,000 people towards our store. So,

$480 x 15,000 = $ 7,200,000

Inventory turnover for one month = $7,200,000