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Thinking of starting a Supermarket/hypermarket chain. Good idea?

FastLaner007

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Hey ladies & gentlemen,

I am from the UK and Asia. I wish to start a national (which I hope will become Global someday) Supermarket/Hypermarket chain. But there are already many big established Billion Dollar local competitors in this industry. Can I still dream of a becoming a $100+ million business in less than 10-15 years?

I know that MJ has preached in his books that competition is good and they can be beaten by executing better. Many of you here too believe in the same premise.

Can I have some more reassuring words of the FastLane wisdom from you FastLaners?

Thanks.
 

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PizzaOnTheRoof

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Why a supermarket?
 
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FastLaner007

FastLaner007

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Why a supermarket?
Because there will always be a need for day to day supplies and I have a passion for owning giant Hypermarkets in many countries bro.
 

Envious

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Why 'your ' supermarket? What's going to be different and entice customers?

I'm also from the UK and we pretty much have 'supermarkets' covered unless you can come up with something unique?
 

MJ DeMarco

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Because there will always be a need for day to day supplies and I have a passion for owning giant Hypermarkets in many countries bro.
That's not the right reason.

And supermarkets deal with the worst margins in the modern world.

Before trying to compete with Facebook (or Kroger / Safeway) and making $100M in the next year, I suggest trying to make $1,000.
 

PetePreneur

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How are you planning on raising the money to build the supermarket? I don't know exactly how much it will cost, but it's not exactly cheap.

Also, how are you going to buy in the kind of bulk quantities that these supermarkets buy in to help you compete on price?

There's a saying that goes something like "Don't try and beat Walmart at being Walmart". Don't try and copy them at their own game, which is pretty much buying in such huge quantities that they can sell the stuff for super cheap.

My advice would be to go into some kind of a niche store that sells high end products. You can always scale by going into lots of different niches if want to.
 

PizzaOnTheRoof

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How are you planning on raising the money to build the supermarket? I don't know exactly how much it will cost, but it's not exactly cheap.

Also, how are you going to buy in the kind of bulk quantities that these supermarkets buy in to help you compete on price?

There's a saying that goes something like "Don't try and beat Walmart at being Walmart". Don't try and copy them at their own game, which is pretty much buying in such huge quantities that they can sell the stuff for super cheap.

My advice would be to go into some kind of a niche store that sells high end products. You can always scale by going into lots of different niches if want to.
I agree 100%.

How can you be the Whole Foods of _____?
 

Scot

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As someone who operates in the grocery world...

Don’t.

Grocery stores have razor thin margins. And you’ve got giants in this industry like Aldi over in Europe.

Just because it’s a large market that is a necessity doesn’t mean it’s a market you should enter.

Whats your market differentiator?
 

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Kak

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There is absolutely money out there for the right operator. There are many well loved and fast growing grocery chains around here.

The question is... Are you the right operator? Will you become the expert? Literally the guy that owns the best, and the most well run chain in the area?

You can do it. It is possible. The proof is out there. Every one of them started somewhere. Like anything worthwhile though, it is going to be a LOT of work.

All industries have certain difficulties, this is no exception.
 
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Successful Steve

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Americans always love a new grocery store, especially here in the Northeast.

I don’t know if anyone has ever been to a Wegmans, but it was rated as the best grocery store. Me describing it won’t even do it justice.

Lidl and Aldis are growing like crazy too.

It seems like every 5 years a new grocery store franchise is being started.
 

xps2340

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Lets forget a "chain" & start ONE grocery store. Can you start one? ABSOLUTELY!

.....well, IF you have the right levers. Primary lever being massive capital. Lets say ~10M-20M. VC money. Banks unlikely to go in (well they will but thats another story), VC may (provided you're a seasoned proven businessman with $$$ track record). Burn rate is enemy numero uno. You'll enough cash to last you through years of (ideally) minimal (to modest) loss. Obviously don't expect it to be fully "your" grocery store. Equity will be diluted offcourse.

Now for the easy part.....aka taking a match and lighting all that cashhhh on fire! Hire armies of lawyers, insurance tax team, 100 hourly employees, salaried managers, marketing, software dev team, website dev team, mobile app dev team, market research team. Allocate enough $ for the TripleNet for the lease (300-800k/yr), infrastructure & maintenance. Stock the shelves, wait to reach enough sales to hit distributor minimums and discount levels. While it is true that grocery is low margin, they survive via high cash turnover.

Now back to the hard part....your USP. Your niche. Are you a discount guy (read: Aldi, Lidl) or a fancy pants guy (read: Marianos, Wegmans, Harris Teeter, Meijer). Get lucky & plop your store at a place with high demand and minimal competition. Depending on what you decide your USP should be, go super price-centric (Food Lion) or quality-centric (Harris Teeter) or be known for having "food bars" (Wegmans). Do you want to stock tiki torches as well as raw chicken? Do you want to have a slight ethnic bias? Mexican? Italian? German? Indian? Obviously millions of decisions to make here.

3-6 years down the road, you've done everything right. You're a well known expert in the grocery biz AND your investors still talk to you. Now you ask for more money, iterate your exact processes onto a second location and pray to your God!
 

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