Grocery store-restaurant hybrids are taking off in popularity, and it’s easy to see why.
The grocerant business model is a win-win for everyone involved. Customers can stock up on groceries and enjoy a convenient, delicious meal in one spot, and grocers enjoy higher retention rates and revenue.
But operating a retail store and restaurant at the same time can be challenging — which is why you need a rock-solid business plan. Whether you’re starting your grocerant from scratch or adding a quick-service restaurant (QSR) to your existing grocery store, we’ve got you covered.
Let’s explore how to open a grocerant in five simple steps.
1. Do Your Research
Knowledge is power, especially when it comes to opening a small business. Before selecting a location or creating your menu, you should know who you’re competing with, who your customers are, and what they want.
Understand Your Customer Base
The first step in your research journey should be identifying and learning about your ideal customers.
Check out your area’s census data to discover who your neighbors are. Does your local population skew younger or older? Do they have lots of disposable income, or are they on a budget? Are there any strong dietary preferences or restrictions?
Answering these questions will help you build a business that meets the unique needs of your community.
For example, if your neighborhood has a young, wealthy, health-conscious population, your grocerant should specialize in organic produce, health foods, veggie-packed salads, and hearty grain bowls.
Size Up the Competition
Visit other QSRs and specialty grocery stores in your neighborhood, paying close attention to their menus, product selection, pricing, design, and customer service.
Take note of what they’re doing well — and where they could improve.
This competitive analysis will help you set your new grocerant apart from the competition, offering customers something they can’t find anywhere else.
For example, you might find that no QSRs or grocery stores in the area cater to shoppers with dietary restrictions, like dairy allergies or gluten intolerance. In this case, you might open a grocerant specializing in these options.
Tackle Food Safety Regulations and Licensure
Another critical topic to research is the legal landscape surrounding grocerants. You might have to apply for a business license, get a food service permit, schedule an inspection with the health department, and provide proof of insurance, so start this process early.
You should also take the time to learn about food safety regulations and best practices before opening your grocerant to the public.
Legal requirements for grocery stores and restaurants vary from place to place, so check with your local health department for more information.
2. Make a Financial Plan
Financial planning is perhaps the most important step in opening your grocerant, laying the foundation for profitability. Let’s look at two key steps in creating one.
Calculate Your Costs
First, determine your grocerant’s startup and ongoing costs. Here are a few examples of what to budget for:
- Location costs: Include your lease or purchase price, renovation expenses, and utility bills.
- Equipment: Calculate the cost of refrigerators and freezers, shelving, shopping baskets, kitchen equipment, tables, and any other grocerant must-haves.
- Inventory: Determine the cost of initial inventory and estimate how much it will cost to keep your grocerant well-stocked.
- Licensing, permits, and insurance: Include the fees associated with your grocerant’s business license and food service permit, as well as premiums for business insurance.
- Labor: Research competitive wages and benefits in your area for cashiers, servers, kitchen staff, and other roles.
Being prepared for these expenses will give you peace of mind and help you make more informed decisions as you work toward opening your grocerant.
Set Profitable Prices
The right prices are another essential ingredient for grocerant profitability. While high prices might drive away budget-savvy customers, new business owners often set prices that are too low, making it difficult to generate enough revenue to outweigh their costs.
That’s why we recommend calculating how much it costs to stock each product on your grocery store shelves and produce each item on your QSR’s menu. Factor in the wholesale price, labor costs, storage expenses, and more to determine the actual cost of goods sold (COGS) for each product. Then, ensure your sticker price is higher than this number.
Pro tip: The right grocerant point of sale (POS) software can eliminate these manual calculations and help you set and adjust prices for each of your products and menu items.
3. Create a Product Strategy
Your next step is to decide what your grocerant will sell. What’s on your shelves and menu should appeal to your customers’ unique preferences and tastes, so keep them in mind when curating your product selection.
First, let’s talk about your menu. QSRs usually focus on meals like:
- Sandwiches
- Wraps
- Salads
- Build-your-own bowls
- Nachos
- Tacos
That’s because these items can be prepared quickly to customers’ exact preferences. For example, a customer can order a custom sandwich with specific ingredients, and your kitchen staff can assemble it in a matter of seconds.
Curate Your Grocery Product Selection
If you’re starting a brand-new grocery store, you’ll have to decide what goes on your shelves. Your product selection should align with your brand and meet customers’ needs.
For example, if you’re planning to open a butcher shop that also serves grilled-to-order proteins, you might offer a wide range of farm-fresh meats, marinades, and seasonings.
Grocerants should also focus on grab-and-go items that complement their menus. For example, near your QSR area, offer a wide range of chilled drinks, single-serve sides, and desserts.
Become an Inventory Management Pro
Grocerant success doesn’t just require you to stock the right products — you also have to stock them in the right amounts. Before opening your store, create a solid inventory management plan.
Our recommendation is to rely on QSR inventory management software. Instead of manually counting and recording your stock levels, this tool monitors your inventory in real time, helping you prevent stockouts and minimize spoilage.
4. Invest in the Right Tools
Next, it’s time to deck out your checkout and QSR counters with the right technology. An industry-specific POS system will help you manage the retail and restaurant aspects of your operation.
Here are just a few features to look for:
- Integrated payment processing ensures quick, secure checkouts.
- Perishable and weight-based inventory management helps you maintain the perfect balance of inventory on your shelves and in your kitchen.
- QSR modification allows your customers to customize your menu items to their preferences.
- Kitchen printing lets your kitchen staff prepare customers’ orders quickly and accurately.
- In-depth sales reporting reveals your grocerant’s sales trends over time and helps you learn more about your customers.
We also recommend looking for a POS provider that offers unlimited training and 24/7 support. Your support team can help you customize the system to meet the unique needs of your grocerant.
Related Read: Grocerant Point of Sale Systems: A Comprehensive Guide
5. Market Your Grocerant
The final step in opening a grocerant is to build a thriving customer base. Let’s look at three ways you can accomplish this goal.
Build Brand Awareness
First, you have to let potential customers know that your grocerant exists.
Start by claiming your Google Business Profile. Add your open hours, upload your menu, and add high-quality images of your grocerant’s interior.
You can go a step further by creating a website to help potential shoppers learn more about your grocerant’s offerings. As you grow, you might consider offering e-commerce, letting customers order their groceries and meals for pickup or delivery.
Offer Promotions
Promotions are a critical part of any grocerant’s marketing plan. A well-planned promotion can bring new customers through your door, boost their basket sizes, and increase your inventory turnover.
Meal deals are a go-to promotion for grocerants. These deals encourage shoppers to purchase an entree from your QSR alongside grab-and-go grocery items like a drink and side for one discounted price.
Your POS system should make it easy to set up recurring promotions like meal deals and schedule special, one-time discounts in advance.
Launch a Loyalty Program
Want to ensure long-term success for your grocerant? Give customers a reason to come back again and again.
Launching a loyalty program encourages customers to visit your grocerant more often and spend more money with you to unlock extra savings and special perks. For example, they might unlock a free entree from your QSR as a reward for their loyalty.
Managing a loyalty program might sound intimidating, but the right POS system makes it a breeze. Look for one with a built-in, customizable rewards program to make it easy for cashiers to sign up new members, track their rewards, and apply discounts at the grocery or QSR checkout counter.
How To Open a Grocerant With Markt POS
Congratulations! You’re ready to become your neighborhood’s favorite place to grab groceries and a convenient meal.
Opening a small business can be a tough journey, but you don’t have to do it alone. Markt POS, our all-in-one POS solution, is specifically designed for unique businesses like yours. It includes all the features you need to run a profitable grocery store and QSR, including kitchen printing, menu modifications, powerful inventory management, sales-boosting promotions, a built-in customer loyalty program, and advanced reporting and analytics.
Plus, our team of grocerant experts is available 24/7 to answer your questions and help you solve challenges.
Schedule your live, personalized demo to see Markt POS in action.
