Supermarket franchise

S

sprokit

Guest
I moved into an estate at the end of 2007 and at the time the sales lady told me spar would be opening a store in a building at the front of the estate. No store has opened in the 3000sq ft building and it is advertised on daft at 90,000 a year since early 2008.
Every day as i walk past the empty building it makes me curious as to why nobody would take it on. The estate has 250 three and four bedroom houses and i guesstimate a catchment area of a further 200 houses.
How does a supermarket franchise like spar work?
Spar provide marketing, advertising and sales support and in return the franchisee agrees to purchase all stock from them?
What kind of turnover is expected from one of these shops?
I think the estate could support a small shop but possibly not the turnover required for one of the supermakets chains.
 
if spar or someone like that has not taken it on I would be very carefullif you are thinking of taking it on yourself
 
dinjoecurry said:
if spar or someone like that has not taken it on I would be very carefullif you are thinking of taking it on yourself
Click to expand...

I am not thinking of taking it on. Just curious as to the kind of turnover required for this type of business.
 
If you take into account fit out, fridges and machinery etc usually a breakeven turnover for this size store would be in the region of €55,000 per week
 
To operate on the margins today and take on the costs (i.e. 11% wages, for a store that size maybe €22,000 light and heat p.a. fit outs etc...)
If your turning 2.8 milllion a year @ 22% you will only have 630k to cover your costs of which 90,000+22000+324800 are gone straight away before you could pay vat, leasing etc.. I reckon if you could get a good cash flow you might take home 30k a year. If you were lucky at 55k pw.
 
There is a site available in a provincial town, on a main street which would be ideal for a Spar/Centra. Its about 2000sq and the rent is reasonable, (20k per annum).

There is no Spar/Centra in the town centre and I reckon there may be an opportunity. However, in the current climate I am unsure if this will fly or the banks will help finance it.

Has anyone any experience of running a convenience store in rural Ireland during a recession?

Also, whats the difference between Spar and Centra.....I think there is a difference in relation to how they invoice and payment terms and the rebate structure etc.
 
Hi,
I have 17 years experience in the convenience store game;started in the last bad recession in 1986 and did well then.
The irony is that with what I know now versus then I wouldn't touch it with a barge pole now if the same opportunity came up now.
So much for naivety and ignorance.

Regarding your situation if you think the site is a goer then contact Spar/Centra/Londis and the rep. for the area in question will know better than anybody the potential of the store, population stats etc.

To do that just get on to their websites, get the no. for the 'development manager' for that area and call him and have a chat.

If he is any good you will have a fair idea where you stand and often they will know if any of the competitors are going to go in.

Good luck anyway;these are terrible times but they have their advantages insofar as you should be able to negotiate good deals with landlords etc.
 
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