Here in the UK, we’re becoming a nation of ‘top-up’ shoppers. That means it’s a great time to invest in a convenience store franchise. Here, we list some of the best investment supermarket franchise opportunities currently on the market.
Supermarket franchises can be very profitable business ventures, primarily because people will always need shops to buy food and other daily essentials. However, there have been some big shifts in the sector recently.
The supermarket sector in the UK – how is it changing?
Firstly, the emergence of discount stores like Aldi and Lidl has drawn customers away from the four big players: Asda, Sainsbury’s, Tesco and Morrisons. By mimicking popular brands and saving money by displaying products in their shipping boxes, discount stores have enabled consumers to conduct their weekly shop for a lower price.
Another factor altering the supermarket landscape is the rise of online shopping. The big four supermarkets now offer collection and delivery services, while specialised online retailers such as Ocado and AmazonFresh have further expanded the market. According to Statista, the UK is expected to have the world’s second largest online grocery market by 2020, after China.
Shop little and often Almost one in five Brits visit a convenience store every day.
While large supermarkets have traditionally appealed to the majority of consumers, smaller stores cater to the growing army of ‘top-up’ shoppers who prefer to shop little and often. Changing consumer habits mean that almost half of people no longer do a big weekly shop, as people prefer to purchase an average of seven items during frequent visits to local convenience stores. In fact, almost one in five Brits claim to visit a convenience store every single day.
What can we learn from this? Despite supermarkets introducing food delivery services, large discount stores and small convenience shops are increasingly taking shoppers away from them. So, investing in one of these models could be a wise business move.
>> Read more:
There aren’t many supermarket franchises currently looking for investors in the UK, but 7-Eleven is one example of a grocery store franchise that’s expanding overseas.
This American convenience store started offering its franchise model in 1964, after purchasing a number of Speedee Mart franchises across California. 7-Eleven was ranked #1 on Entrepreneur magazine’s 2017 Top 500 rankings list, and was named one of Fast Company magazine’s ‘Top 10 Most Innovative Companies in Retail’ in the world. The company has also been ranked as one of the Military Times’ Best for Vets franchises.
Becoming a 7-Eleven franchisee: 7-Eleven currently operates in more than 17 countries and welcomes applications from interested franchisees on its website. Although it doesn’t currently offer opportunities in the UK, you can set up your own 7-Eleven in another country if you’re interested in international territories. To find out more, click here.
How much you need to invest:7-Eleven hasn’t revealed how much it would cost to set up a new store, as the total could fall anywhere between $100,000 and $1 million, depending on location.
What you get for your investment: The franchise model is unique in that it shares profits from across the group with its franchisees, as well as the royalties they make on sales, offering all franchisees multiple revenue streams within their business.
Top grocery store investment opportunities in the UK
7-Eleven is one of the only grocery stores that offers franchise agreements to investors who want to set up a store from scratch. But many brands are keen to recruit convenience shop owners who are interested in transforming their independent store into a branded one. Below, we list some of the best investment opportunities with grocery store chains in the UK.
If you’re hoping to join a hugely successful, world-renowned supermarket chain, look no further than SPAR. The brand began in 1932 with one Dutch store. By championing “fresh food”, “fresh-looking stores” and “fresh ideas”, SPAR has become the world’s largest food retail chain, operating over 12,000 stores across 34 countries. In the UK alone, 50,000 friendly staff form the face of the brand, helping to generate a turnover of over £3 billion.
How much you need to invest: SPAR hasn’t published details about its investment requirements, but you can find out by getting in touch with the franchise.
What you get for your investment: Investors can benefit from the worldwide recognition and trust of the brand and extensive financial support. SPAR stands out from the competition as a result of its own range of essentials that boasts over 1,000 lines. If you are interested in joining SPAR, simply head to their website to get started.
2. One Stop
This subsidiary of Tesco operates more than 770 company-owned stores and 160 franchisee-owned stores across England, Wales and Scotland. Franchisees are not constrained to a specified list of supplies; as long as they purchase 95 percent of their stock from One Stop, they have the freedom to select their own local suppliers to make up the remaining five percent.
How much you need to invest: One Stop is looking for established retailers who would like to convert their store into a One Stop franchise and are willing to pay up to £50,000 to make that happen.
What you get for your investment: The chain will provide a store re-fit, refreshing the interior and exterior of the shop to reflect the One Stop brand in accordance with the existing store’s size, dimensions and features. Fill out the company’s online form to find out whether you fit the criteria and qualify for a free consultation.
3. Bargain Booze
This chain currently operates a network of 700 company-owned stores and 350 franchise units under a number of names, including BB, Select, Central and Wine Rack.
Becoming a Bargain Booze franchisee: If you generate sales of more than £15,000 per week, Bargain Booze wants to hear from you.
What you get for your investment: Bargain Booze is offering a three-year franchise agreement, but you may be able to renew it once the term is up.
>> Read more:
There are around 2,100 Best-One branches across the UK at the moment. This brand has developed its own range of products, comprising more than 400 products, from soft drinks to household goods and baby care items.
Becoming a Best-One investor: To join Best-One, you’ll need to make a minimum wholesale spend of £18,000 per month. You should also be willing to take at least two chilled and frozen food deliveries a week, meeting the brand’s in-store standards and adhere to monthly promotions.
What you get for your investment: Best-One hasn’t released many details about its investment opportunity, but you should get in touch with the brand to find out more.
252 stores hold the Budgens branding. This supermarket business is thought to be one of the oldest in the UK, having served customers since 1872.
Becoming a Budgens investor: You’ll need to achieve a minimum spend of £10,000 per week. Visit the store’s website to find out more.
What you get for your investment: Budgens is proud not to set membership or weekly fees for its investors, but it still offers a fantastic level of ongoing support:
The support from Budgens has been brilliant with regular promotions along with leaflets to reach out to locals, fantastic product lines, such as meals for tonight, Discover the Taste and Discover the Choice, and a wide range of fruit and vegetables. – Kiri Kiritharan, Budgens of Gipsy Hill
There are currently 1,776 Costcutter stores in operation. This company focuses on being there for customers who “give in to the unexpected” and are spontaneous. That’s why it offers great value basics and “the surprising extras”.
Becoming a Costcutter investor: Applicants should be driven and committed to the brand in order to make sure it maintains profitability. To get involved, click here.
What you get for your investment: Costcutter doesn’t charge membership costs. Here’s how you can expect to benefit:
There are 1,968 Londis branches up and running in the UK. The business was founded in 1959, so it’s got over 60 years of retail experience in the grocery store sector.
Becoming a Londis investor: You’ll need to spend over £5,000 per week and sign up for a three-year contract. To get the ball rolling, click here.
What you get for your investment: Londis hasn’t listed its investor benefits, but you should expect a reasonable level of ongoing support. Find out more by getting in contact with the brand.
Becoming a supermarket franchisee
It’s difficult to say how much it would cost to set up or renovate a grocery store, as it often depends on the size of the store you’re working with. While cheaper franchises could offer investors the chance to make a quick return on investment, more expensive opportunities could include extra perks, like One Stop’s store re-fit.
To find out more about the grocery sector, how shopping habits are changing and why the retail market is shifting, read our article on the subject here. Or browse franchise opportunities in the wider category of retail here.
Alice Tuffery, Point Franchise ©