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What is the profit margin for a kirana store in India?
I am looking for an average figure for an average kirana store having average daily
needs item.
I know the fact that it highly varies from item to item for a kirana store.
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9 Answers
S R Vivek
S R Vivek, Passionate and helped many SMBs scale.
Answered Jun 8
Average income of an average kirana store having average sales is average as
compared to a high income kirana store.

If you are looking to open a Kirana store, there are ways in which you can improve
your sales exponentially.

Instead of wondering how much they earn start thinking about how they can earn
more.

Some factors which influence the sales of a Kirana store are :

Location: location plays a crucial role in setting up any shop. It should be easily
accessible to people. example: can be near places where people take morning walks
so that they can buy the necessities while they are going back home.
Name : You wouldnt believe me if I said that McDonalds is what it is today because
of the name. Its patriotic. Choose a name which you can further use for expansion
as well like nilgiris.
Customer relationship : make your customer believe in you. Establish a healthy
relationship. First impressions last and after your first contact make sure they
come back. Iys like a guy leaving a jacket at a girl's place so that they meet
again atleast to return the jacket but it doesnt mean you take and keep something
of the customers :p
Availability: makke sure your store has all the necessities people would ever need.
Creativity : this is one of the most important aspect as this would set the store
apart. Do something very differently that spreads like wildfire and it would fetch
more customers to you.
When life throws lemons at you, make lemondae, instead make creative lemomade. You
can have disposable glasses of good quality with a lid and your store names stamped
on it and you could give free lemonade to anyone who purcahses , it wouldnt cost
much and its already peak summer time, who wouldn't love lemonade.

This is just an example from the top of my head, there are tons of them.
Think BIG: always think big. Do not stay constrained to a Kirana store in a
locality. Take steps from the start itself which can help you establish it into a
big business.ALWAYS CONSIDER SCOPE FOR EXPANSION.
PS : you can ping me for anything related to scaling and establishing small and
medium scale businesses.
11.1k Views 7 Upvotes
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K Tejas
K Tejas, Entrepreneurship projects
Answered Mar 31, 2016
it would range between 5% to 30% . Basically, a volume game. But just can't sock
products because they are on offer from the wholesaler you buy.

Products you sell are usually demand based and in some cases seasonal.
Stock products by guaging the demand and buying pattern of customers.
Usually when you buy from a wholesaler the more you buy the more margin you gain.
Fmcg products like soaps detergents, toothpastes, cosmetics have a longer shelf
life you can buy them in bulk to getter profit margins.
Register your business with a large format wholesaler like Metro cash and carry,
Reliance Market and Carrefour for better deals on bulk purchases. They can offer
you better deals than a small wholesaler.
Follow first in first out (FIFO) rule for selling perishable goods.
25.7k Views 13 Upvotes
Nikhil Agarwal
Nikhil Agarwal, Co-founder & COO at Your Retail Coach (2012-present)
Answered Apr 9
Profit margin varies depending upon the product mix, size and location of the
store.

If your store does not justify any of the above criterias then there is a
possibility of loss as well.

If we consider the products margin, then in Retail, FMCG is the sector wherein
there is a huge variation in gross margin of products I.e Average margin on basic
hot selling product varies from 5% to 25%. For other products margin can be upto or
more than 25%. Household products like plastic buckets, mugs, wipers, etc can fetch
you gross margins upto or more than 100%.

Size of store matters a lot in FMCG. The bigger the size, the better is visibility
of products, so you generate better sales, and reap better profits. Its a viscous
circle.

To know more about FMCG business, YRC offers Retail Business Management Training
in FMCG.

For details click here to http://www.yourretailcoach.in/re...

5.3k Views 1 Upvote
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Rahul Rajamuthiah
Rahul Rajamuthiah
Updated Apr 1, 2016
There are some key levers in deciding about the profitability of a Kirana store,

Margins - Given that you are aware of the margin structures, I wouldn't dwell in
detail there, except that you have to be conscious of the sales mix. High mix of
staples in your sales mix will give high sales value, but low net margin.
Rentals - In Indian real estate scenario, with urban rentals hovering above Rs. 40
per square feet, it doesn't work very well. The rent of a store shouldn't be more
than 4% of sales on the safer side.
Catchment - You should have a dedicated catchment which does its monthly pantry
filling from your store. Because the larger ticket sizes will help the store cross
a minimum threshold. Say there should be at least 100 customers giving the store
at least Rs. 300o per head per month.
Inventory - This is the most critical balance, which will effect your cash flows.
Ideally you should have a overall inventory cover of around 2 weeks, but that could
be pretty tight in an Indian distribution environment, but more than 4 weeks is
lots of cash stuck for a convenience store.
Operational expenses & Cash flows - This is a very critical lever for any business,
more so for a convenience store. These expenses will be a function of the
entrepreneurs capacity to hard work, and keep eye on the details.

Edit: I think, missed, giving some actual numbers. So a standard Kirana store with
a staples/grains mix of not more than 15%, should be able to make a net margin of
around 12%. Hence a store with an monthly expense of around Rs. 2 lakhs, should
breakeven at a monthly sale of around 15 lakhs.

Hope this answer helps!!

12.9k Views 13 Upvotes
Shailesh B Sharma
Shailesh B Sharma, "Gyanisant" - Connects the brand with its Customer & Consumer in
real time.
Answered May 19, 2016
The gross margin for any standard of Kirana store will range between 12% to 18%.
Certain brands would be less than 10% and few would be around 20%, typically the
trade loads on average will be around 3% to 8%.

As the major chuck of business is generated by the player's whose margins will be
at 10% to 12% +schemes.
There is a significant improvement which can be witnessed in coming days in terms
of Kirana store income, it's the reflection of consumers willingness in
experimenting new categories and products. Which will result in some increment in
retailer income as overall.
10.6k Views Answer requested by Sreeraj Roy
Abhishek Nayak
Abhishek Nayak, Abhishek have expert knowledge of b2b industry.
Answered Mar 24
Profit margin for kirana store is vary from product to product. It depend on a lot
of factors

Macro Economic environment

Quantity of goods being purchased
Category Of Goods / Services
Maintenance costs
Delivery Cost
Competitors cost etc.
It is very difficult to predict the profit margin without knowing a specific goods.

In general FMCG Model

Retailers (Kirana): 1030% Approx.

Distributors: 520 % Approx.

Manufacturers: 1570% Approx.

1.8k Views 1 Upvote
Agastya Markandaya
Agastya Markandaya, works at Lehman Brothers
Answered Aug 8, 2015
Most items offer very low margins. You will make your crores only if you sell in
huge quantities.

Daily care products like shampoos and soaps give you 5%. On food commodities you
get up to 10%. But guess which gives the maximum margin? Its dairy products. Milk,
butter, cheese, paneer all give you 20%.

There is another one - big mineral water cans. The 20 liter cans can be procured
for Rs. 10 and sold at Rs. 20. But you must remember that this is always home
delivered. So you need a TVS XL-HD (http://www.tvsmotor.com/xl-hd.as...) to carry
all that water. And since you are talking about a kirana store which means a 1
person set up, you cant afford to hire anyone else. So you need to figure out who
will sit in the shop when you go deliver the water cans.
13.7k Views 9 Upvotes
Anonymous
Anonymous
Answered Aug 8, 2015
Varies across the items and brands.

Minimum margin of 8% is on very fast moving goods like soaps from very known brands
like HLL and P&G.

10% on other regular fmcg items (like creams/ toothpaste etc) from HLL.

Most other goods have a margin of 20%.

Grocery items like rice, pulses, sugar, atta etc have 20+% margin though some shops
will sell high visible items like sugar at lower margins.

Margins on packed spices are insane. The cost price is about 25% of the MRP so a
lot of shops sell them discounted.

Margins on some very slow moving items like toothbrush are about 300-500% depending
on brand.

So overall margin of a kirana shop would be about 15-20%. If the competition is

less, or shops that give credit to buyers maybe even 30%.

Source: Operated a kirana store chain as my first startup ;)

13.6k Views 35 Upvotes
Rohit Kaushik
Rohit Kaushik
Answered Dec 16, 2016
I would like to add one more point which other answers are missing:

Particularly in Delhi NCR and other metro cities, people try a lot of online
shopping. Everything is available online and is far cheaper than the local Kirana
store.

For example, I just checked it on GROFERS that MRP of 10KG AASHIRVAAD ATTA is Rs.
380, but it is selling for Rs. 309. If you order above Rs. 500, you can apply a
coupon code which will further reduce the price by 15 percent and if you are new to
it you will get 20% off for your first three orders. From here you can calculate
how much is the price gap between local vendor and online vendor. Adding to it,
GROFERS will drop the stuff to your doorstep, so you dont have to drag 10Kg weight
to your home (when you buy it from your local Kirana shop). Also you can pay
online, so you dont have to worry about the cash.

How can a local Kirana give you so much discount and comfort? Also there is a lot
of competition among Kirana shops as every 2nd or 3rd shop is Kirana store.

So, I dont think a normal Kirana store would be making so much money until and
unless they have large number of regular customers.

PS: I am not an agent of GROFERS. I have just taken it for reference.

4.7k Views 4 Upvotes
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