Cost of Setting Up a Supermarket in Nigeria 2021
So you wish to know the cost of setting up a supermarket in Nigeria 2021 and the amount you will need to start?
If you say yes, then here is a good analysis that will help you to determine the amount of money you will need to set up a good and standard supermarket.
This article is provided with the sole purpose of providing you the information that will guide you on how and what you need to start a successful supermarket business in Nigeria.
Before we proceed, kindly know that the major expenses in setting up a supermarket in Nigeria is renting/building of shop and buying of goods to fill the shop.
Apart from those two major expenses, other expenses are minor and can be taken care of using the profit you generate.
But note; it takes a good business idea to own and manage a supermarket very well and make the kind of profit that will help you to expand.
Where is the Best Place to Locate a Supermarket?
In general, the location of your supermarket has a very vital role to play in your business success.
Where is the Best Place to Locate a Supermarket? Base on our business insight, it is advisable to locate your supermarket at any of;
- Busy areas like marketplaces
- Close to school campuses
- At busy roads
- Motor Parks
- Dormitories and Lounge
- Busy environments, etc.
Locating your supermarket in such busy areas/Locations will help to boost your sales rate.
While thinking of locating your supermarket in a busy place, also consider the security situation of the place to avoid lost due to looting, burglary and so on.
The best things to check out for when choosing a place to locate your supermarket should include;
- Level of security/insecurity
- Road condition
- And other environmental hazard
How Much Does it Cost to Start a Supermarket in Nigeria?
The amount needed to start a low standard supermarket falls between Eight Hundred Thousand Naira (N800,000) to 1.5 Million Naira.
Starting a medium supermarket in Nigeria will cost between two million Naira (N2,000,000) to five million Naira (N5,000,000).
Setting up a standard supermarket in Nigeria will cost between Seven Million Naira (N7,000,000) to One Billion Naira (N1,000,000,000) or to any amount you wish.
The above amount may or may not include the capital for renting or building a the structure.
So if you wish to rent a shop or to buy a land and set up your own shop, then you should kindly check the cost of building the shop separately.
Also remember to consider other expenses like transportation fare, fueling of generator, paying of bills, employing of workers and so on.
Profits Running a Supermarket in Nigeria
Owning a supermarket is one of the most profitable businesses in Nigeria if you really want to make so much profit.
Below is the estimated profits in running a supermarket in Nigeria depending on the level of supermarket you are running.
Low Standard Supermarket Profit
A low standard supermarket in Nigeria can generate a monthly profit between Two Hundred Thousand Naira (N200,000) to Three Hundred and Fifty Thousand Naira (N350,000) after all Expenses.
- Cost of registering a Barbing Salon Business name
- POS business and the amount needed to start
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A medium supermarket Profit
A medium supermarket in Nigeria can generate a monthly profit between Four Hundred Thousand Naira (N400,000) to Seven Hundred Thousand Naira (N700,000).
A Standard Supermarket Profit
A standard and large scale supermarket in Nigeria can generate between Eight Hundred Thousand Naira (N800,000) to Two Million Naira (N2,000,000) depending on the size and rate of sales.
Factors Affecting Profits in Supermarket Business
Note: there’s no fixed amount of profit you can make from your supermarket. The amount of profit you can make from your supermarket depends on many factors like:
- The amount of profit you make per sales
- Where you buy your whole products from
- The standard and quality of your products
- The rate of customers you have
- The location of your supermarket
- Your customer service
- The reputation and reliability of your supermarket
So if you wish to make a lot of profit from your supermarket, then you have to set it up to valuable standard and choose a good location.
Factors Affecting Supermarket Business in Nigeria
Below are some of the common factors that affect the setting up and the success level of running a supermarket business in Nigeria.
Bad Roads/Transportation: Rough roads can cause a huge damage during the transportation of goods. A rough handling of perishable goods due to bad road, may result to damaging of such goods.
Price Fluctuation: one of the major problems in the management of a supermarket Nigeria is the fluctuation of prices of commodities.
Prices of commodities in Nigeria depends and is determined base on many factors like;
- Cost of production
- Economic factors
- Government policies
- Exchange rate
- Cost of transportation (fuel price)
- Rate of demand
- Season, etc.
Expenses: the higher your expenses, the lesser the profit you make, the lesser your profit, the higher the tendency or running a lost.
If possible, then always cut down some unnecessary expenses to save your business and to increase your profit.
Weather/Season: transportation of goods during rainy may be exposed to the danger of damaging perishable goods during rainy season.
Environmental Factors: Environmental factors can also influence the rate of profit. Such factors include:
- Fire outbreak
- Extortion and looting
- Robbery and Burglary
- General insecurity
Low Sales: slow or low sales can generally lead to poor profit and such is base on some factors like location, quality of products and poor customers services.
Importantly, if you can manage and plan well before setting up your supermarket, then you can avoid the above challenges and make so much profit from it.
At this this point, we believe you have known the cost of setting up a supermarket in Nigeria and we believe this was helpful.
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