There is a phenomenal growth rate in the supermarket industry in Saudi Arabia. The competition is hotter than the weather. Ordinary business models have no place here. A solid UVP might take time, but that’s the way things are. It is critical to develop a sound business model if you are planning to start a supermarket business in Saudi Arabia. Intense competition in Saudi Arabia necessitates an in-depth understanding of consumer behaviour to determine the ‘right value’ for them. Here are some key steps to start a supermarket business in Saudi Arabia:

    1. Business Plan

As with any other business, you should begin with a business plan for your supermarket business. The business plan describes every aspect of the business in a well-written manner. A comprehensive business plan allows you to make informed strategic decisions based on factors such as the target market, the ideal product assortment, ownership structure, operating costs, how a business model will earn revenue, break-even sales and projecting cashflows.

    1. Market Research

It is imperative to conduct market research to understand the size and competitiveness of the market as well as trends and forecasts for the future. In general, no two supermarkets are the same. There are differences in consumer behaviour, demographic trends, demand patterns, aesthetics and culture, competition, distribution channels, etc. Hence, market research is a crucial step when starting a supermarket business in Saudi Arabia. When conducting market research, you can also study your competitors to see how things work for them.

    1. Location Strategy

The location strategy describes how businesses decide where to locate their store and outlets. Saudi Arabia is a large country, but the majority of people live in just a few regions. The key to getting access to a wider customer base is to buy/rent/lease a place in these popular areas. The cost of buying or renting prime space in Saudi Arabia is high, so you need to do financial planning accordingly. Therefore, it is important to be as realistic and accurate as possible when assessing the ideal location for your supermarket business. 

    1. Rope in Technology

Operating a supermarket is much more complex than managing a grocery store. Multiple processes and operations are involved in supermarkets. Both backend and frontend operations run simultaneously. A supermarket cannot function effectively and efficiently without an appropriate business software application. For instance, ERP software supports multiple processes, such as tracking, assessing, streamlining, and connecting all operations. Business ERP is vital, but choosing the right one is even more important. Your ERP system should be updated as technology advances and improves over time to ensure your business can scale in the future.

5. Design a supermarket layout

Customer behaviour is affected by the layout of a supermarket, the placement of items, and the overall ambience. Good design and layout take people (staff and customers) into account, then integrate them with materials (raw and finished) and machinery in such a way that they work together as a single, efficient unit. As well as reducing unnecessary work, a well-planned supermarket layout maintains product flow and customer flow. Also, shoplifting is prevented, sales are increased, and your brand is enhanced. 

6. Marketing strategy

Your sales and growth rate are directly affected by your marketing strategy. Flyers, small newspaper segments, and other forms of print media can be used to hype up your brand. The use of discounts and rewards can also help you attract new customers and retain existing ones. Taking part in social events and sponsoring them can significantly boost your supermarket’s image. In addition, you can also target purpose-driven customers through these activities by participating in local cricket matches, blood donation camps, and sponsoring local school events 

About  YRC Consultants

Developing a supermarket business model isn’t easy, and huge investments are needed to succeed. People often wonder, “How do I start a supermarket business?”. You can contact a retail consulting firm such as Your Retail Coach if you have thoughts like these. Among the services we offer are business plans, operations plans, marketing strategies, market research, SOPs, process automation, inventory management, and more. Our guide will help you establish a successful supermarket in Saudi Arabia. For more information, you can visit our YouTube channel:


How can I enter the Saudi Market?

Direct sales can be made to Saudi Arabian companies from outside the country. To enter the market, however, most companies appoint a distributor. The Ministry of Commerce regulates these relationships, and firms are permitted to have more than one distributor regionally.

Do small Grocery Stores make Money?

In Saudi Arabia, conventional grocery stores may earn 1-2% bottom-line profit, but big supermarkets may generate 5-12%. In small independent grocery stores, however, the percentage is more likely to be between 1 and 4%. This is because several factors affect independent owners more, such as marketing, product costs, and shrinkage.

Where do Supermarkets Buy their Products from?

The products that supermarkets sell come from a variety of sources. For example, when it comes to grocery products, many farmers sell directly to these stores, but it is also common for supermarket stores to also have relationships with grocery produce suppliers who work with local farmers. These stores may also buy their products from wholesalers.