Planning to Open a Grocery Store? Here's how to choose a perfect location!

. 6 min read
Planning to Open a Grocery Store? Here's how to choose a perfect location!

A grocery store is a store that usually sells a wide variety of food products, either loose or packaged, other than fresh fruits and vegetables. They are found almost everywhere, mostly in and around residential areas. It is a place where people go to buy their rations-either daily, weekly, or monthly.

The Indian food and grocery market is valued at a whopping $ 810 billion. A majority of this market (90%) is dominated by traditional grocery stores that mostly operate out of small spaces. Starting a grocery business is a lucrative option since the consumers' demand is on an upward surge with the swelling population and rising per-capita income.

Here is a quick checklist before you open the doors of your grocery shop. So, read on!

How important is location while investing in a grocery store?

Location is perhaps the single most important factor in deciding the success of a retail store, and it can make or break your business. You need to be where the action is. Hence, zeroing in on the perfect location of your store is as crucial as your decision to go into this business. The right grocery store location takes into account the following: Area, Neighbourhood demographics, population density, visibility, local competition, the amount of traffic that goes by, among other things.


You should study the number of people who live in the area, and how many of them can be your potential customers. You can research their probable incomes and whether they can afford your grocery products. Also, know about the average foot and vehicle traffic.

Grocery stores depend on neighbourhood patrons, and there should be enough of them to support your business.

Traditional Indian Marketplace

A traditional Indian marketplace is a one-point location that caters to diverse necessities starting from green groceries to fresh stock to dry groceries, medicines, and much more. 90% of the grocery shops in India are situated in a marketplace. Here there is a high probability of sales. It also works well for the stores because many of their offerings complement each other.


A grocery retailer should always think of the customer first. He should try to analyse the customers' behaviour. A shopper usually goes to the nearest shop, other things like convenience or cost being the same. So, your grocery store should be located at a reasonable distance from your target customer’s home.


Your store location should be in such a place that it draws high traffic throughout the day. It could be close to a bank, school, hospital, or even a petrol pump. Precisely, a place where people can walk-in or drive through to pick up a few items. You should try to visit several possible locations and get a feel of the places, before zeroing on one.


Competition need not always be a bad thing and can influence your grocery store location strategy. If you find that there are other grocery stores in the area you have chosen, then it can also mean that the conditions are favourable for business there. You can also stock a different product mix than what the others are doing, and cater to a niche clientele.


Different grocery retailers have their areas earmarked, but it is not a formal arrangement. You should study whether the surrounding geographic area can support your business. You should think of your business’s area as to how far people walk to go to the grocery store in your city.

For example, if people in your locality walk on an average 10 minutes to reach a grocery store, you should consider that to be your business area. A tip is that the lower the value of the purchase, the shorter distance people are willing to travel for it.


Your grocery store should be near the road so that people can walk or drive there easily. There should be ample parking space. Ideally, your shop should be located near a major road with good traffic.


Your shop should be located in such a manner that it is easily seen by people as part of their normal activities. Many consumers visit a grocery store in the path of their daily commute, so visibility from the road is an important point.

Surrounding Neighbourhood

There should not be any untoward activity in the neighbourhood that can spoil the reputation. You should select a peaceful and prosperous neighbourhood that will be conducive to your grocery business.

Apart from location, there are some other factors that you must take into account before you start your grocery enterprise. They are briefly described below:


As a grocery store owner, you should properly do your homework first before starting your entrepreneurial journey. Draw up a business plan and know about the customers and the competition in your area. Also, conduct a market survey to know about the customer’s preferences.

Cash Position

A grocery retail business takes time to get into a strong footing, and it can take months to achieve customer recall. The Return on Investment might not be so great in the beginning. But you will have running expenses of your shop plus your personal expenses to take care of.

That is why, you should have strict control over the cash flow, and avoid any unnecessary expenses.

Comfort Shopping

The newly affluent middle-class consumer prefer to shop in a grocery store where he is comfortable. In the sweltering summer, they want to shop in the comfort of A.C. They also like large shopping aisles with products stacked neatly on shelves. The items should be placed category-wise so that it is convenient for the customers to choose.

Customer service can make or break a grocery shop business. You should hire courteous shop-assistants who are always on their toes.

Home Delivery

Due to the pandemic, many old people are avoiding going to the grocery store. So, the grocery store location for delivery should not be very far from residential neighbourhoods. You have to hire a reliable delivery boy to send supplies to the seniors at their homes.


One of the cheapest and easiest ways to market your store is to print and distribute flyers and pamphlets. You can print a picture of your store along with the address, and distribute them to passers-by. Or, you can get into an arrangement with the newspaper vendor and get it distributed to the people along with their morning papers.


The Indian middle-class customer is very price-sensitive, and many people appreciate a discount on the Maximum Retail Price (MRP). Let us suppose a customer who does monthly shopping, buys goods of amount Rs 3000. A discount of 5% will amount to Rs 150. If you negotiate your rate with your wholesaler and pass on the benefit to this customer, he will be your repeat customer. So, it is a good idea to deal in bulk, keeping your profit margin low.


A study of grocery shoppers has found that customers place more value on quality, even ahead of price.


If you have to make a mark in the grocery game, you have to be creative. The modern trend is to have large physical stores. Apart from the usual products, you can also have a separate section for cooked foods. You can also stock some exotic products which will appeal to some communities. These are some product differentiators that you will need to combat online food delivery companies.

Is Online Grocery The future?

Online sales of food are small but increasing, creating the need for

groceries to have a good home delivery system. Grocery retailers may be experts in running their stores, but many have a problem with online order fulfilment. You should tie-up with some online service provider so that the name and details of your business come up in internet searches. You also have to spruce up your logistics, so that you can deliver to the customer on time, keeping the costs in check at the same time.

Many customers want to find out the ‘grocery store near me’, and it is one of the top searches on Google. You can partner with Google so that when such a query comes from your target customers, the name and location of your shop comes on the Google Map on your customer’s smartphone. It also gives details like the directions to your shop, timings, and customer reviews if any.
Whatever the new normal is it won’t be the old normal. So, you have to plan accordingly. Grocery shops meet the needs of the people on a day-to-day basis, and starting one is a profitable business idea. But you have to take into account several factors which we discussed here, grocery store location being an important one among them.

Also read:

1) Grocery Stores In Lucknow
2) Grocery Stores In Jaipur
3) Grocery Stores In Bangalore
4) Grocery Stores In Chandigarh
5) Grocery Stores In Kolkata
6) Grocery Stores In Mumbai

We hope our article helped you with your research. You can also find detailed list of grocery stores in these cities:
Grocery Stores In Surat Grocery Stores In Gurgaon Grocery Stores In Ludhiana
Grocery Stores In Hyderabad Grocery Stores In Kanpur Grocery Stores In Chennai