The natural foods market in the United States is a growing and highly competitive segment, which provides substantial opportunities, but poses significant challenges. Research shows that the consumption of such products has notably increased in recent decades, and they currently account for a considerable part of total food sales (Hwang & Chang, 2019). However, this upward trend attracts the attention of large retail chains with immense financial and human resources. Thus, the success of a company willing to enter this market largely depends on careful planning and implementing all the aspects related to its store opening. Every detail can be a valuable factor in determining new business efficiency and attractiveness to its potential customers. The elements requiring specific attention include selecting the right location, hiring the necessary people, arranging the initial supplies, defining the expected financial indicators, and conducting an efficient promotion campaign.
The first issue to be solved while planning to open a new store is choosing the optimum spot for it. It is difficult to underestimate the significance of this decision since it is going to shape the customer profile and business performance for years. The first consideration in this regard is to ensure sufficient market potential at a given location. This also includes analyzing the visibility of the future store and street traffic at its place. Then, it is necessary to analyze the existing competition, especially generated by large-scale chains. For this purpose, a spatial accessibility model can be used, which classifies all areas based on the distance from a retailer selling similar products (Wang et al., 2018). It is also reasonable to consider that people with higher-than-average income constitute the majority of potential customers since the price is the primary barrier to purchasing such products (Hwang & Chang, 2019). Besides, good placement relative to suppliers and available infrastructure can substantially reduce future logistical expenses. When all these aspects are taken into account, the selected site becomes a foundation for a successful business.
The next critical step is to determine the required staff for the store opening and its operation. It is possible to involve temporary workers for some tasks, but most employees should be hired permanently. Sharing the authority with future employees and allowing them to make some decisions within their competence brings them to feel their importance and generates an overall favorable corporate culture (Wah, 2017). The first position to be filled is the store manager, responsible for the general administration of its opening and operation. It is then feasible to think of an accountant to be in charge of the financial aspects and the arrangement of all banking relations. A person specializing in purchasing should be appointed for the initial stockpiling and concluding of the necessary supply contracts. Finally, several merchandisers, sales managers, and cashiers should be hired based on the expected store size. It is also necessary to admit that outsourcing some activities, such as legal services, is a feasible approach for a small or medium enterprise. This will allow creating a dedicated and professional team for the new store.
After hiring the required personnel, it is reasonable to define the expected financial characteristics and necessary stock for the store opening. The first task is to calculate permanent expenses, such as rental fees and utility payments. Within their reduction efforts, evaluation of the possible energy saving options, along with the costs of their implementation, should be conducted. Then, it is necessary to calculate labor costs based on the previously selected organizational structure. Various administrative fees and the expenses for initial supplies will constitute the final part defining mandatory spending for a store opening. Based on the known available budget, this will allow determining the spare funds, which can be allocated to the promotion campaign. Besides, evaluating the expected revenues based on the initial market research and newly received store expense data will allow obtaining preliminary profit values. The review of all these financial indicators will both substantiate the previous decisions and serve as a motivator for the necessary adjustments in-store placement and structure.
Finally, a critical step for a new retailer is a targeted and efficient promotion campaign, in which the grand opening occupies a central part. Since the store belongs to an already popular natural foods market, it should be focused not on the overall benefits of this type of product, but the particularities of the given business. It should provide specific data such as “location, merchandise, hours, prices, and special sales” (Lamb et al., 2017, p. 254). For this purpose, it is reasonable to order a short news story in several local newspapers and magazines. Besides, a door hanger campaign dedicated to the grand opening ceremony and distribution of discount coupons can be valuable for increasing retailer popularity (Brown & Fullen, 2017). The main idea to be reflected in the advertisements is the dedication to its quality, which is the principal factor for most natural purchasers in this segment (Hwang & Chang, 2019). This comprehensive promotion campaign will be a crucial tool for the success of a new store in this highly competitive market.
As the discussion above shows, planning for a grand opening is a complicated task requiring consideration of multiple aspects. The selection of the proper site will define the potential number of customers and the level of competition. Hiring the right personnel and distributing their responsibilities properly is another required prerequisite for successful business operation. A proper promotion campaign will increase brand awareness and make it popular among the locals without imposing an unnecessary financial burden on the company. Although all these activities require significant time and effort, their proper execution will create a foundation for the long and smooth operation of the new store.
References
Brown, D., & Fullen, S. (2017). How to open & operate a financially successful specialty retail & gourmet foods shop. Atlantic Publishing Company.
Hwang, J., & Chung, J. E. (2019). What drives consumers to certain retailers for organic food purchase: The role of fit for consumers’ retail store preference. Journal of Retailing and Consumer Services, 47, 293-306. Web.
Lamb, C. W., Hair, J. F., & McDaniel, C. (2017). MKTG. Cengage Learning.
Wah, H. E. (2017). Your smart retail market strategy book. Partridge Publishing Singapore.
Wang, L., Fan, H., & Wang, Y. (2018). Site selection of retail shops based on spatial accessibility and hybrid BP neural network. ISPRS International Journal of Geo-Information, 7(6), 202-222. Web.