How Much Does It Cost to Open a Grocery Store? [Grocery Store Startup Costs]

Grocery Store Startup Costs

The grocery industry is vast, with plenty of profits to go around. However, opening a grocery store requires a sizable investment up front. While success is never guaranteed, detailed planning and careful accounting in the initial stages will tip the odds in your favor. 

For entrepreneurs, it’s an interesting time to explore the industry. Between groceries and restaurants, Americans are spending more on food than they have in 30 years. More than 11% of consumers’ disposable income is dedicated to eating, the highest percentage since 1991. As an added bonus, independent grocers have an advantage over the big box chains when it comes to providing fresh produce, sustainable meats and seafood, and the all-important personal touch.

Determining the actual cost to open a small grocery store will be your biggest challenge — but also the secret to your success. There are obvious costs that immediately jump to mind, like utilities, rent, and wages for your staff. Then, there are stealthier expenses that tend to sneak up, such as marketing costs and interior design. There will be sleepless nights trying to figure it all out, for sure. But hopefully, armed with our cost breakdown, you can rest a little easier knowing you’re prepared for any curve balls.

If you’ve dreamed about your own grocery store, here’s some advice about how much it costs — and how to do it well.

How Much Does It Cost to Open a Grocery Store

Startup costs for any retail business will be some of the highest expenses you’ll ever have to face, and figuring it out will feel like a crash course in business finance.

The cost to open a small mom-and-pop grocery store, the kind you might find on a neighborhood corner, ranges between $25,000 and $50,000. A gourmet grocery store, on the other hand, runs much higher, from $50,000 to $400,000. The location of your store will impact the price, as will licenses and registrations required by your state, which can run upward of $10,000. Many factors come into play, including the rental market in your area, the size of your inventory, the number of employees, and how much you’ll be renovating your retail space.

The trend toward sustainability is expected to gain even more momentum in the coming years and will touch all aspects of your grocery business, from the products you stock to the operating environment. By 2030, more than 15 sustainability-related regulations are expected to go into effect, the majority related to food waste (making sure food doesn’t end up in landfills), single-use plastics, and increased restrictions on labeling. These are important considerations to factor into your costs as you plan ahead.

Price Range: $25,000 – 400,000

Business Opening Cost by Square Foot

Many factors impact the cost per square foot, but as a general rule of thumb, smaller grocers are typically around 3,000 square feet, whereas a mid-size store ranges from 10,000 to 15,000 square feet, about the size of a Trader Joe’s. Perhaps more important is how you utilize your space. 

Many small grocers keep the bulk of the inventory on the retail floor, constantly restocking and changing out merchandise to keep groceries fresh and encourage shoppers to return for limited specialty items. In this case, you’ll want to devote most of your shop’s square footage to shelf space, with a smaller area dedicated to inventory storage. The classic grid setup, with straight, tall shelving in the middle and open space at the entry, feels familiar to customers and provides easy access to  all the intriguing selections in your store.

Pro tip: Customers tend to veer right as they enter, so you’ll want to place impulse buys and highlight special items there. Your most popular items and refrigerated cases should be at the back of the shop, so customers must walk past other tempting items to get there. 

Price Range: $15 - $40 per square foot

Startup Costs to Expect

When creating a lasting budget for your business, it’s important to differentiate between fixed and variable costs. A fixed expense is one that typically does not change from month to month, like rent. A variable expense goes up and down from month to month, depending on your business's needs.

When starting out, do as much research as you can. You’ll want to plot out a long-distance course to know what to expect at every turn — and how you’ll pay for it.

 Here are some of the most significant liquor store startup costs and expenses you can expect. 

1. Utilities

Utilities such as gas, water, electricity, internet, and phones must be set up before you open your doors, and the costs can add up quickly. On average, expect to pay about $2.10 per square foot for commercial space in the U.S. Lighting and HVAC systems tend to be the biggest “energy hogs” for most small businesses. 

Price Range: Around $2 per square foot

2. Location

While the interior of your grocery store can always be updated to create the right atmosphere, your store's address can make or break it. A convenient location with parking is key for small grocers, as many shoppers can simply head to a big box store or supermarket chain instead. With that in mind, you may be paying a bit more than the average.

Retail rents in U.S. shopping centers have reached an average of $23.98 per square foot, according to Statista. Western states have the highest rents in the country, averaging $29.01 per square foot. The Midwest clocks in at $18.26, making it the most affordable region. Of course, rents can spiral into the stratosphere for premium, high-traffic locations (think Clark Street in Chicago’s Lincoln Park or Third Street Promenade in Santa Monica).

Before you pass out from sticker shock, remember that rent will be by far the most expensive upfront cost of opening a retail store, especially since you should have more than a month — ideally two years — in accessible capital.

Price Range: About $18 - $29 per square foot 

3. Interior Design

You might be a financial stickler, negotiating the lowest rents and keeping your utilities in check. But when it comes to interior design, things can add up fast. Most interior designers charge for their services by the hour, ranging from $50 to $500 depending on their experience. On average, you can expect to pay $100 to $200 per hour.

Before you balk at hiring a designer for a grocery store, consider that many premium grocers attract customers based on their pristine displays, welcoming vibe, and transparency around sourcing. Customers want to know what’s fresh that day, sample interesting cheeses, and chat with knowledgeable employees about wine selection. Designing a space for easy customer-employee interaction will be key, along with a sparkling clean place to showcase your goods. 

The bottom line: your grocery store’s unique brand and purpose will greatly impact the design costs.

Price Range: $100 to $200 per hour

4. Finishes and Equipment 

Even the most utilitarian grocery stores will require substantial equipment. You’ll need refrigerated cases, sturdy shelving, display tables, signage, lights, and a music system at a minimum. Also, factor in costs for specialized equipment for delis and cheese counters, such as slicing machinery, grinders, knives, and other cutting tools. But don’t fear; there are ways to save money, such as buying used equipment or leasing big-ticket items until you get your footing.

Price Range: About $56 per square foot, but it largely depends on how swanky or bare-bones you want it to be.

5. Pre-Opening Expenses

Whether opening a gourmet shop brimming with fancy imported delicacies or a shoebox-size corner store, you’ll need everything in place the minute you fling open your doors. Grand openings often draw a crowd, so plan on stocking extra inventory to meet the demand. 

Many small grocers distinguish themselves with personal service, recommending ways to cook specialty ingredients or guiding beer nerds to the latest releases. You’ll want to invest in training your staff before the official launch, including training employees on your POS system.

6. Marketing and PR

Your brand identity is the cornerstone of your business and should be at the top of your to-do list. According to a recent Forbes article, a small business owner can expect to spend anywhere from $1,000 to $5,000 on startup branding. This includes everything from website design to logo creation and establishing a social media presence. All your future marketing and PR efforts will flow from your brand, so it’s essential to make an investment upfront.

After establishing your grocery store, ongoing marketing and public relations efforts will typically cost 5 to 10 percent of annual revenue but can go higher during times of growth, like if you expand to a second location. Things to consider: You may want to build an app, hire social media managers or influencers, create customer loyalty programs with product giveaways, circulate coupons and discounts, and purchase an email marketing service. 

7. Capital and Loans 

There’s nothing wrong with having big dreams of success, but it’s wise to ensure your grocery store is backed up with capital and contingency funding. First, the good news: the demand for grocery stores is constant and not tied to seasons or trends. If your startup expenses are kept low, you could be turning a profit within a year or two.

You’ll need to put aside at least six months of funding to get your small business through the bumpy startup phase while establishing your customer base. Learn more about financing and loans here. 

Price Range: $20,000–$100,000 

8. Exterior Finishes and Design 

If you’re allowed to change the exterior of your building, you may want to invest in sprucing it up. Painting your logo on the building, installing lighting, and adding light landscaping can attract customers to your shop. Small grocery stores often place signage in the window or on the sidewalk with “blackboard specials” and discounts and exciting arrivals, just like restaurants do. An exterior business sign alone can range from a few hundred dollars to a few thousand. 

Price Range: 1,000 square feet of exterior renovations typically cost between $1,000 and $4,000. Painting the same-sized exterior space will run an additional $3,000, based on national averages provided by Angi. 

9. Organizational and Development Costs

It’s all fun and games until your grocery store is closed down because you didn’t have the right permits. These typically include a business license to operate legally within a specific jurisdiction and permits for handling and selling meat products, which are often regulated to ensure food safety and sanitation. 

If you plan to sell alcohol, tobacco, or lottery tickets, additional licenses will be required. Costs for off-sale liquor licenses vary by state and, just like many other expenses on this list, can go into the tens of thousands of dollars — and beyond. Start your journey here to find out which department you’ll be dealing with in your state and what rules and laws your state requires. For more information about liquor licenses, including the difference between an on-license and an off-license, refer to our Liquor License Guide.

Price Range: $350 - $2000 for a business license, food handling permits, and health inspection fees. A liquor license costs as little as $100 in Idaho and as much as $1,400 in California. Lottery-related expenses typically land around $500.

10. Professional Services 

Even if this isn’t your first retail rodeo, you might want a few professionals by your side through the startup process. There is one professional that every entrepreneur knows they will need early on: an accountant. And now you can add two more into the mix: a lawyer and a retail business consultant.

A good attorney will assist in every aspect of your business, from permits and licensing to trademarking your logo and formally incorporating your business. A business consultant will guide you in improving your business, from branding development and market research to advising on point-of-sale and technology.

Business consultants typically charge $150 to $200 per hour. The average attorney rate in 2022 was $313.00, but it varies widely, from as low as $150 to $600 or more per hour.

Price Range: between $1,000 and $5,000

11. Technology and Point of Sale

 Every retailer needs a point-of-sale system to run smoothly. Depending on your grocery store’s needs, you’ll likely need a robust system with technologies for inventory tracking management and customer loyalty rewards, at the very least. Most grocery store owners also seek out POS systems with tools that help manage employee scheduling and payroll.

Research a great digital ordering system as well. Consumers love the convenience of ordering groceries online — including wine and spirits — and having them delivered straight to their doorstep. Currently, 12 states allow delivery of any type of alcohol, and 31 states allow beer and wine.

Price Range: Get a Quote

13. Staffing and Management

Grocery stores require a sizable staff to make sure inventory is freshly restocked, and customers are finding what they need.. You might hire butchers, fishmongers, cheese experts, cashiers, baggers, and more. Your staffing needs entirely depend on the size of your store and its function: are you a small grab-and-go outfit, or are you competing with Whole Foods? Consumers seek out independent grocery stores over supermarkets mainly for employee expertise and fresh and artisanal inventory. Training your staff in the nuances of all items in the store should be a top priority.

Price Range: According to the Bureau of Labor Statistics, the mean hourly wage for a retail salesperson in the U.S. was $17.64. When you factor in taxes and employee benefits (if you offer them), the Small Business Administration estimates total employee costs to be 1.25 to 1.4 times their salary.

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Industry averages can help you understand how much you can expect to spend when starting a grocery store. But as you build your customer base and grow your business, you’ll need to keep strategizing and researching the latest technologies to keep costs low and see big returns on your investment. 

Related Resources

• Best Grocery Store POS Systems
• Grocery Store Business Plan
• How to Open a Grocery Store
• Grocery Store Equipment
• Grocery Store POS Software
• Grocery Store Marketing Ideas
• How to Design a Grocery Store
• Grocery Store Ideas and Concepts
• Grocery Store Inventory Management
• How Much Do Grocery Store Make
• How to Run a Grocery Store