It is a great idea to set up a grocery store in the Philippines. This is especially true If you live in an area with almost no competition, as a grocery store can bring you a good chunk of income.
But how do you set up a grocery store in the Philippines? What are the processes and steps needed? Additionally, are there any tips for opening a grocery store in the Philippines? Fear not. This will all be covered today.
The Philippines has a population of over a hundred million. Therefore, the market for consumer goods is significant, especially for everyday needs such as food. They also provide ease to the public and have many other perks that convenience = profit.
Let us go through each stage of opening up a grocery store in the Philippines.
How To Set Up A Grocery Store In The Philippines?
Step 1: Plan Your Business
After researching the grocery store industry in the Philippines, you need to create a clear plan. This is highly important to be successful in any business.
It can guide you on the specific needs of your grocery. You can also explore new business aspects, such as starting a grocery store Philippines online.
The following are some types of business ownerships common in starting a grocery store in the Philippines:
Sole Proprietorship means that you own and operate your grocery store alone. When you set up a grocery store in the Philippines without any partner, you have more freedom in the structure and control of your business. There are also lesser restrictions from the government.
The disadvantage is usually less financial support and capital to set up a grocery store in the Philippines. In addition, you will also have less protection against personal liability. For example, you might have to sell your properties if you end up not being able to pay your debts.
This means you have two or more people as co-owners of your grocery store in the Philippines business. Unlike a sole proprietorship, you and your partners are both responsible for personal liability. Therefore, you do not need to exhaust all your assets if the business is not a success.
If you consider this when starting a grocery store in the Philippines, you and your partner should agree on the investment you will contribute.
You may also need to assign different responsibilities to the company. For example, how to divide the shares of income and losses must be decided to successfully set up a grocery store in the Philippines.
Your business plan should have your method of securing funding sources. Regardless of the type of business ownership, you have to have secure sources of money.
Aside from the traditional method of a bank loan, you can make use of your savings. Your family, friends, business partners, and government offices can also help you set up a grocery store in the Philippines.
As for the amount you need to spend in starting a grocery store, it depends on the area size of your store and the variety of goods you want to sell. (More on the specific amount below) …Buying by the case, the prices are around 500 to 1000 pesos. If you have a budget of 500,000 pesos for goods, you can have around 300-400 kinds of items in your store. This variety is good enough for your customers to choose and come back again.
In making a business plan, there is no single formula or format. However, one tool that may help you is our free downloadable PDF/WORD template for a business in the Philippines, which you can download below.
Step 2: Legal Side Of Opening A Grocery Store In The Philippines
At the time of writing, Below is the list of requirements needed to open up an official business in the Philippines.
To sell specific items in your store (for example, alcohol), you may need additional requirements that have not been stated below. This is why we would recommend speaking to your attorney concerning your individual products/services.
- Registration form from DTI or SEC
- Baranggay clearance
- Community tax certificate (cedula)
- Contract of lease or land title
- Zoning clearance
- Sanitary permit
- Environmental permit
- Fire permit
- Occupancy permit
- Public liability insurance
- Outline of the location
You need to get these licenses and permits from your municipal or city hall to operate your store. There are step-by-step procedures that will guide you in processing, as each area may operate slightly differently.
It would be best if you also went to your barangay, BFP, PNP, sanitary department, and PNP as a business owner.
Getting a good and reliable accountant will be beneficial when you are setting up a grocery store in the Philippines. Accountants can help keep track of the government’s regulations and laws, such as the payment of taxes. (If one is missed, there may be a penalty to pay) With the help of an accountant, you can also keep your records on the track and avoid related problems in the future.
Step 3: Find The Best Location
Where to set up a grocery store in the Philippines is a highly important factor. Finding the perfect location needs a much more thorough consideration. You may need to think about the population, visibility, competition, neighborhood, and the number of customers needed to break even.
If you live in a large subdivision, you can choose a location near the subdivision’s gate because many people shop there when they see a grocery store in this location. But overall, the choice is yours. There may be a much better location in your area.
It’s a good idea to remember that customers will go to the nearest grocery store if they see more attractive shopping opportunities. Additionally, the distance from them to the store is also a benefit of their shopping experience.
Step 4: Find The Essential Equipment
You may need to determine the type of items you sell first before deciding what equipment to get. For starters, you will probably need the following:
- For Perishable Goods, Refrigerators, And Freezers
- For Displaying Products, Display Cases, And Shelves
- For Customers’ Use, Baskets, And Pushcarts
- A Cash Register That Has A Machine For Processing Credit Cards
The equipment is essential to the success of starting a grocery store in the Philippines. Your main goal is to make sure that different goods are available to your customers and preserved well (especially for drink and food commodities).
Therefore, picking the right refrigerator size, for example, is crucial. You may also need to make sure that the drinks and frozen goods have proper storage, and they should be easy to access by customers.
Step 5: Searching For Suppliers
After deciding on the equipment for your grocery store, your next concern is where to get the products from. Owners tend to get stocks from distributors directly.
A reliable and robust network of product distributors is needed to ensure enough stocks in setting up a grocery store in the Philippines.
Companies such as Unilever, Nestle, Fortune Cigarettes, and Procter & Gamble supply the wholesalers through their distributors. When you purchase from them in bulk, you can get significant discounts or be given credit terms. Another advantage is that the shipment is hassle-free because the goods will be delivered to your grocery store.
You also have the option to make a contract with the wholesalers. You can visit Suy Sing Commercial for more information. Sometimes, they offer more affordable goods compared to distributors. They also deliver for a minimal amount. However, one downside is that you will need to pay in cash.
Step 6: Hiring Employees (If applicable)
This is one of the critical parts of setting up a grocery store in the Philippines. Just like other successful businesses, you have to hire the best people.
Your staff should know how to interact with different kinds of people. For example, customer service plays a significant role in your store. They also have to be trustworthy enough to be handling money.
Aside from hiring a security guard, installing a CCTV is also highly recommended. Again, this is one of the best store investments.
A unique hack is hiring or training people to help customers decide what to buy! Although online marts have appeared, many still prefer going to physical stores because they want someone to assist them in purchasing.
Individual services an edge if you put up your grocery store in the Philippines. When your employees make an effort to help your customers and try to know them, your customers will be willing to pay more. (Halo Effect).
Step 7: Marketing & Adverting
Beginning at the shelf level is where you can begin advertising your grocery store. Therefore, when you set up a grocery store in the Philippines, the placement of your items is vital.
Placing the fast-moving items on the bottom shelf means the customer has to bend down to get them. Placing them on eye level will free up more space to avoid double or triple product handling.
Putting high-profit items on eye level is always a recommended tactic. It doesn’t matter if you want to place the fast-moving items on the bottom shelf or the shelves at eye level. You may need to remember to be consistent. Also, the positioning of the items must be logical.
You can use a variety of advertising methods. For example, there is a trend where businesses are promoting their grocery stores online by posting on social media and including exclusive discounts as they find this reaches more people with less effort.
If you have an extra budget, you could design a business website wherein customers can learn more about your grocery store and your products. You may be surprised by how much attention you get when you advertise online.
Step 8: Stop….Start….Continue.…
At this stage, you are at the completion stage of setting up your grocery store in the Philippines. You are now hopefully in the process of earning a profit, but what comes next?
The Stop, Start, and Continue method is a great idea to apply to any new business.
In this section, you will need to look at all areas of your business and analyze what processes/operations you will need to stop. For example, perhaps there is a particular product or a system that is losing money? Stopping these things in a business is critical, no matter the business age.
In this section, it is recommended to start to look at what you as a business owner can introduce into the grocery store. For example, is there a new product range we need to start? Is there a new promotion that needs to be applied? Or perhaps a new shopping experience which would attract more customers? In other words, what things can you start today that will positively impact your business and your profits…
Lastly is the continuous stage. In this section, you will focus on business areas that need to be continued to bring success to the business. These three processes are very efficient when opening a grocery store in the Philippines as it allows you to see the business from a different perceptive.
How Much Does A Grocery Store In The Philippines Cost?
There is no set fee when it comes to the cost of setting up a grocery store in the Philippines, as frustrating as it sounds. This is because the area, providers, supplier, and size impact the price; however, as an estimate ….
To open up a small grocery store in the Philippines would cost up to 1 – 2 million pesos, including a survival budget. On the other hand, opening up a large grocery store in the Phillippines could cost anywhere from 5 -15 million pesos.
You could initially lower costs by employing your family, starting with a tiny store or opening an online grocery store. However, as a business owner, it is best to analyze the pros and cons of each of these options.
Extra Tips to Set Up A Grocery Store in the Philippines
1. Know Your Target Market
It is beneficial to know the people who will be potential patrons of your grocery store. Therefore, observing the people you see in and near the area where you plan to put up your grocery store business is helpful.
You can see the people who will likely buy in bulk, their type of income, and what they would buy. This will make your planning easier and more effective. Studying the target market makes any business one step closer to success.
2. Grand Opening Promotion
Once everything is set, it is time to open up for business officially. Do not cut back on your advertising efforts. Grocery stores cater to different kinds of people, so the demand is steady.
That is why it is a good idea for the promotion to be widespread. But, of course, you do not always need to do this regularly (but it does help) because when your store has established its name, the marketing will occur naturally.
3. Keep Your Customers Coming Back
Putting a lot of effort into marketing, customers will be curious enough to drop by your grocery store. However, leaving something to last is a different story.
This can mean discounting certain items in your store whenever there is a holiday. If you have competition such as 7/11 – SM, etc., try to know what they are doing and do something different.
4. Be Innovative
If you want your grocery store in the Philippines to stand out, you have to know how to innovate. It would help if you offered something that other grocery stores do not have.
You can try to entice customers with the presentation, creativity, price, and a lot more. You need to try to come up with unique and profitable ideas.
To set up your grocery store in the Philippines apart from the rest, you can try starting with any of these:
- Coffee Vending Machine
- Hotdogs, Burgers, Or Any Snack Stands
- Siomai Kiosk
- Milk Tea Or Shake Stands
- Bread Such As Toasted Siopao, Donut, Chocolate Cake
There are just a few add-ons that are great when you are just starting. First, you do not have to pay a lot. Thus, these are profitable but straightforward ideas that can bring more people to your store.
5. Think Of Your Grocery Store Design
You will usually see meats and produce displayed along the perimeter with the dry goods at the center in a traditional store layout. However, you do not need to follow this kind of layout if you wish.
It would be best to make sure that the cases and end aisles in your store are pleasing and attractive. No one wants to shop in a wild place. Product placement is essential.
Although there is no single way to do it, make sure that your set of shelves is consistent. For example, don’t try to mix and match horizontal and vertical shelves.
6. Know The Problems And Challenges You May Encounter
Difficulties when starting a business are inevitable, especially when setting up a grocery store in the Philippines. Therefore, you can anticipate any problems so that you can plan on how to take action.
Bad relationships with your supplier, key employees getting sick, underpricing of some items, and failure to do tax planning properly are some of the possible problems and challenges you might face.
7. Do Careful Inventory Management
If you tend to overlook inventory management, you could lose a lot of money. An excessive supply of products can be a waste when they become contaminated and unsellable.
Nevertheless, you do not want to have a few stocks of products. You could have a bad reputation of always running out of items. As a result, customers might assume that you do not have the products they need and not return them to your store.
You could use MS or Google spreadsheets to do your inventory and determine the items you often have to restock.
8. Be Active In Your Community
You can connect with your community by sponsoring events or having food bazaars. You can also work together with your local government to give out food that you might discard but is still edible.
To simplify, know, and listen to what your community wants. Maybe, the people in your community want to buy homemade products. You can be successful with your grocery store business in the Philippines if you know what your community needs.
Setting up a grocery store in the Philippines Conclusion:
Finally, we hope that this guide and the additional tips on how to set up a grocery store in the Philippines will help you. Remember that customers love to see new things and innovation, so creativity is a strong weapon.
Do not be afraid to take risks. By following the steps and pieces of advice, you can attract more and more people in no time. Setting up a grocery store in the Philippines is not easy, but it can be very profitable and lucrative for many years to come with the right management and plan.
More Tip Opening A Grocery Store
- Start small. Unless you have a specific strategy, it’s often best to open a small grocery store in the Philippines and grow/scale in stages.
- Choose the most accessible location. One of the biggest benefits to customers is accessibility. Choose a location for your grocery store that is best for your customers
- Fully research the market and the risks. When opening a small grocery store in the Philippines, research can save you a great deal of time, effort, and money.
Grocery Store Philippines Warnings
- Spend time on the maths. For example, how much profit can you make when opening a grocery store in the Philippines? What are the start-up costs when opening a grocery store? Hiring an accountant or a financial advisor is often recommended in the early days of business.
- Don’t copy the rest. Many grocery stores are established in the Philippines. Why will a customer choose your store? Is it the price, the location, or the service? Go your own way in business, and don’t be afraid to innovate.
- Hire the most appropriate staff. Staff hiring is important. Can you trust the staff in your new grocery store? You may wish to spend extra time finding the most qualified staff.
Resources & References
- Business registration https://www.dti.gov.ph/negosyo/business-registration-and-permits/#:~:text=Registering%20a%20business%20name%20and,DTI%20Regional%20or%20Provincial%20office.
- Sari Sari store https://businessdiary.com.ph/3635/how-to-register-tiangge-and-sari-sari-stores-with-the-philippine-business-registry-pbr/
- Grocery store business plan https://www.businessplantemplate.com/grocery-store-business-plan-template/
- Retailer trade act https://www.chanrobles.com/republicactno8762rules.htm#.YrKfKHZBzIU
- Consumer act https://www.chanrobles.com/republicactno7394.htm#.YrKfU3ZBzIU