A grocery shop business is a business you can easily start especially in urban towns if you have the capital. Unlike rural areas, people in urban residential areas don’t practice farming, and the few who do have small kitchen gardens. For that reason and many other groceries are a basic need and will always be in need.
The grocery business in Kenya is highly represented by mama mbogas. But you can always take the other route of running a grocery business in a clean and spacious room instead of out in the open.
Just like many other local shopping centers, Kwa Dicii has several mama mboga outlets out in the open where most customers shop for groceries. However, there are a few enclosed stalls that harbor a ‘classier’ group of grocery shopping outlets.
More than before, more entrepreneurs in Kenya are venturing into the grocery store or shop business. Some like Zucchini start big while some start small.
How Joyce and Mary Started their grocery shop business
“My cousin and I started this grocery shop in 2017 January. But, before that, we had a small kibanda business just across this shop. When these stalls were built, we decided to move our business into them. There are several grocery shops around this area but ours is the biggest of them now.” Joyce Nyambura.
Joyce started the grocery shop with her cousin Mary and ran a kibanda as mama mbogas for one year before they chose to go bigger.
“When our kibanda business started growing, we decided to go big and planned to open this shop. Also, the open kibanda was challenging especially when the weather was not good such as on rainy days. So running a grocery business from a shop is worth the investment. ”
Local small mama mboga stands or vibandas don’t require a license or a county government permit to run their business. However, if you want to run a grocery business in a shop, you need to meet the Kenyan legal requirements.
As a small business owner, you need to register your business and get your single business permit and other licenses. You can do this from your respective county council offices or on the eCitizen portal.
“We pay Ksh.3, 300 to Kiambu County annually. This is because our stall is not too big and we are only in the shop. We are required to have a health license because we handle food but we have not acquired that yet.
The county council officers have been on our case severally but we are in the process of acquiring the health license.” Joyce.
On average, a health license goes for Ksh.1, 000. You would need one license for the shop attendant in the grocery shop and another one for the grocery shop as a business each going for Ksh.500.
“When you have the passion for this job, you can even start with Ksh.300 and with time you will find yourself growing and running a big grocery shop.
For us, we started our first kibanda with only Ksh.3, 500. And through our hard work, we were able to save up from our kibanda money and fund our shop. We then applied for a small business loan from a bank and topped up to what we had saved.
Apart from the business permit and stocking up our shop, there are other things that increased our capital. For example, putting up these shelves cost us about Ksh.30, 000. Also, our landlord required a 6 months’ rent deposit. Things like this make start-up capitals vary.”
For a small grocery shop business in Kenya, the capital you spend will be determined by several factors. This highly depends on where you are located, the size of your shop, and the products you are selling. On average you would spend around Ksh.50, 000 for a small grocery shop.
Grocery Shop Location
Different spaces in different locations will be charged differently in terms of rent, deposit, utility bills, and goodwill.
But, when looking for a space to put up your grocery shop, you need to remember that your products are perishable goods. That means you need a space whose temperatures are not too high. You need to get a place that is cool and dry.
“Our shop goes for Ksh.8, 000 per month. That’s rent alone with water and electricity tokens paid separately. When we were starting, we were required to pay 6 months’ deposit and after our first 6 months, we started paying the normal rent amount.
In this area, business shops are in high demand. Simply because it’s near the road and we have several schools and companies around.”
“We get our product supply from Ruiru Market. Suppliers in the market know us because we have been in the business for many years and we have created a business relationship with them.
Compared to when we started out with the kibanda, our shop is big and we acquire our products in crates now. We have different suppliers who supply us with different products. There is a cabbage supplier, tomatoes supplier, etc.
So, we call our different suppliers and make orders in advance and they keep the supplies for us to pick up later. We pick up our products using a transport vehicle and we are charged Ksh.400 because the distance is small. If we got our supplies from Githurai Market, for example, we would pay double or almost triple that amount.
For now, the business is a little bit down due to COVID and this has affected our restocking amount and schedule. We now restock twice a week yet we used to restock daily before COVID.”
Challenges of running a small grocery shop
“You give some customers groceries on credit and they disappear and that’s a loss you suffer.
Some customers are very stubborn. You select the products for them and they don’t like the ones you have chosen. Others interfere with the quality of the product such as avocados in the process of selecting.
The biggest challenge at the moment and for the past couple of months has been COVID. Our business is located near three universities, K.U, N.I.B.S and Zetech and that means a good percentage of our customers are students.
With the schools closed, most students are not around and this has highly affected how much we sell. Apart from the students, we also have locals as customers. With so many losing jobs and also cutting costs in their homes, people are not buying as they used to before COVID.
Also, when COVID hit, we incurred so many losses. No loss is little. Produce would go bad because the business flow is not high as usual. But once we discovered this effect, we decided to reduce the produce we restock.
Another challenge is the loss you experience in the process of transporting your produce from the market to your shop. Some products might not get to the store in good condition and you cannot sell them.”
To those who want to start a grocery business
“This job needs passion, hard work, discipline, and commitment. It’s not an easy job and you need to be ready to make sacrifices such as early mornings in the market even when it’s raining.
Your business will not peak immediately and unless you are patient, you will end up closing your business and go home. Sometimes, business is not at its best and your business might die. When that happens, you don’t give up.
Make sure you have what your customers need because if they come and they don’t find what you usually sell, they will go somewhere.
How you speak and interact with your customers sets the bar for your business. If you want your customers to keep coming back, put a smile on your face throughout, be kind, and be respectful.
A grocery shop business is a rewarding investment and the money you put into it comes back fast.”
A grocery shop business is good and profitable in Kenya regardless of your location. And you don’t need too much capital to start. You can start small and grow as time goes by.
Remember to prioritize your customer and give them the best customer service and fresh products. This way, you will grow your customer base and even expand or open other branches with time.