1.0 Executive Summary
“Jolly Groceries Ltd. ” operating as “Jolly Groceries” (The Company), was incorporated on January 5, 2021, in the state of New York by Neil Stallen and Tim Wilson. Jolly Groceries is a specialty grocery store founded to meet a strong neighbourhood need for quality, Middle Eastern grocery options in the Brooklyn and Downtown New York area.
The Brooklyn area of Downtown New York currently lacks any good grocers or reliable shops to get fresh or specialty products from the Middle East. Mr. Stallen and Mr. Wilson currently operate another grocery store on the other side of town (Macky Market, 837 Bidwell Street, New York) and regularly talk to downtown residents about their need for a specialty ethnic grocery store in their communities. Aside from offering hard-to-find grocery products in Jolly Groceries, their pricing will be more competitive with 0.5% less mark-up on most international products in the store.
Mr. Stallen (15 years of grocery experience) and Mr. Wilson (with 10 years) will be co-owners of the store with 51% and 49% share respectively. Their combined experience and leadership will contribute to the success and rapid growth of the Company. Jolly Groceries’ target customers include Turkish, Iranian, and Arabic immigrants who now live in Downtown New York. They crave the nostalgic tastes of their home country that they can’t find anywhere else locally.
Jolly Groceries is currently seeking a $250,000 loan under the SBA Loan Program to help with launch activities and essential capital and equipment purchases. The shop plans to open in June 2022. The Company seeks to contribute to a world where everyone has access to their favourite foods from their home country or region, no matter where in the world they live. These foods from home will be affordable and easy to find or sourced through Jolly Groceries.
2.0 Business Overview
Jolly Groceries is a new specialty ethnic grocery store opening in June 2022 in the trendy Downtown New York neighbourhood of Brooklyn. The store will carry local and international foods from the Middle East and open seven days a week from 9 am to 10 pm to serve the local community and local Middle Eastern Immigrants.
The Company will be a partnership between Mr. Neil Stallen (owning 51%) and his business partner Mr. Tim Wilson (owning 49%). Mr. Stallen currently owns another grocery store (Aria Market) in New York, where Mr. Wilson is the manager. The two partners have a combined 25 years of experience in the grocery industry.
The store is for the whole community, but the main draw will be for the specialty Middle Eastern products that Aria Market doesn’t have room to stock. It will be physically larger than their Bidwell location, with over 7,000 sq ft of retail space plus 3,900 sq ft of back office, food prep, and inventory storage in the back.
Jolly Groceries will fill a local need for a local grocery store for residents and tourists alike. During the summer months, as the tourist population in New York increases, the market expects to see increased demand for their products, which will lead to a growth in sales.
The Company plans to become a local hub for the local Middle Eastern community. As such, the Company will:
- never compromise on freshness
- always provide friendly customer service
- Focus on sourcing the best diet-specific foods (including keto and gluten-free products) options for their customers.
2.1 Industry Overview
The grocery industry is not expected to become obsolete anytime soon. Consumers are looking to get all their everyday grocery staples and specialty items from one place. With the COVID-19 pandemic, many restaurants were shut down, so customers turned to more fresh food and produce, so grocery stores saw a dramatic increase in success and profitability.
Now, as we’re coming to the end of the restrictions put in place by the pandemic and restaurants are beginning to reopen, the industry is expecting a temporary drop throughout the rest of 2021 as people buy fewer groceries and eat out more. All economic indicators and predictions show this drop to last no more than one to two years before average growth returns for the industry.
Jolly Groceries keeps a close eye on how consumers’ grocery buying habits are evolving. Consumers are becoming more health-conscious and are looking for healthier produce, organic products, and gluten- or GMO-free groceries. This is a need that Jolly Groceries can cater to.
2.2 Mission & Vision Statement
Jolly Groceries’ mission is to create a world where everyone has access to their favourite foods from their home country or region, no matter where in the world they live.
Jolly Groceries’ vision is to become a hub for the Downtown New York community to get fresh local produce and specialty grocery items from the Middle East without travelling far or paying a premium.
2.3 Goals and Objectives
In terms of business growth, the Company has set the following revenue goals:
- Earning $200,000 per month by the end of year one
- +15% growth during year two
- +25% growth during year three
Jolly Groceries also hopes to become a hub for Middle Eastern immigrants in the neighbourhood.
2.4 Core Values
Jolly Groceries staff and managers will make all business decisions and day-to-day operations with the Company’s four core values in mind:
- Customer-focused: Jolly Groceries’ priority is satisfying its loyal customers.
- Quality: The Company provides quality, fresh produce and offers personalized, quality service that you expect from your neighbourhood grocer.
- Compassion: In today’s world, a little kindness can have a considerable impact.
- Goal-oriented: Jolly Groceries believes that goals are an effective growth strategy in business and personal lives.
2.5 Key Success Factors
The success of Jolly Groceries is dependent on the following key external drivers:
- Per Capita disposable income: As the economy begins to bounce back after the COVID-19 Global Pandemic, the unemployment rate will decrease. This will create a situation where families have increased disposable income to spend on specialty and imported groceries.
- Consumer Price Index for Food: Food and grocery costs skyrocketed in 2020 during the pandemic. Low oil prices and the depressed value of the American dollar played prominent roles. This index is expected to rise 2.3-3.3% annually for the next five years, parallel to the rise in costs of consumer products in general.
- External Competition for Supermarkets and grocery stores: With online grocers (like Amazon) and the increasing number of brick-and-mortar grocery stores, there is often intense competition in this sector. Retailers who offer specialized or niched products (ethnic-focus, vegan, gluten-free) will stand out from the competition.
- Population trends: Population has a direct correlation to the success of grocery stores. As of the last available American census data from 2016, New York’s population was estimated at 633,000 people. About 42% are immigrants, and 6.2% are from West Central Asia and the Middle East.
- Proximity to key markets: A critical success factor for grocers is opening shops in key neighbourhoods and heavily populated areas. Clear exterior signage and access to parking can provide additional access to food traffic.
Internal factors that will be pivotal to the success of Jolly Groceries include:
- Maintaining an unwavering commitment to customer satisfaction
- Always providing low-price/high-quality products
- Hiring the right staff to help make the Company a success.
- Maintaining good relationships with suppliers and distributors.
Many staff are required to keep the store operational. In their experience operating Aria Market on Bidwell Street in New York, they found most of their qualified applicants through in-store signage. For Jolly Groceries, staff will be recruited the same way.
A few key staff member positions for the store include:
- Cashiers: Applicants must demonstrate an ability to work in a fast-paced environment and keep their cool in the presence of customers. Proven success in providing excellent customer service will be critical, and they must have a collaborative spirit to become a great team player.
- Cashier and Produce Supervisors: We require store supervisors to have at least three years of experience in a grocery store. This experience means that they understand the inner workings of a grocery store and likely also have valuable leadership skills, which is another requirement for any applicant in this position.
- Prep Room and Produce Workers: Applicants for this position require a proven ability to work in a fast-paced environment. They must work well with others and can lift up to 50lbs.
Staff will be paid between $15.65 and $18 per hour in the first year, $16.25 – $19 per hour in year two, and $17 – $20.50 per hour in year three of operation.
2.7 Management Team
Mr. Stallen started his experience in the grocery industry as a convenience store manager for two years. He went on to be the owner of Aria Market for 15 years. He has experience in all aspects of grocery store operations.
Mr. Wilson will be the store manager as he has extensive experience as the store manager for Aria Market. He will be paid $60,000 per year in year one, $72,000 in year two, and $78,000 in year three.
Mr. Tim Wilson
I am an efficient and experienced retail sales manager capable of assessing customer needs, managing a team and preparing staff schedules. I am a fast learner who is good at multitasking, prioritizing tasks and ensuring all targets are met or exceeded.
- B.Sc. in Industrial Engineering| University of Isfahan, Iran | 2009-2013.
- Leadership Preparation Diploma with CO-OP|ISS Language & Career College of BC| 2019.
Retail sales manager | Iran | 2010-2016
- I managed a successful sales territory that showed consistent sales growth of 20% per year.
- I was responsible for managing a team of staff in the place.
- I was responsible for creating employee timesheets and handling requests for time off.
- I was interviewing new staff and determining their suitability.
Store Manager | Aria Market, New York, US | 2018-2020
- I liaised with customers and suppliers daily.
- I am responsible for ordering stock and stock control.
- We are maintaining the high standards of the place.
3.0 Products & Services
To be competitive in the market, Jolly Groceries will reduce its product mark-up. Competitors typically mark-up grocery products 2x, but the Company will only mark up 1.5%.
It is expected that meat and produce will make up the majority of revenue, at 40% and 25% respectively. General grocery sales will contribute 20% of the total business revenue. Overall sales for the first few months are expected to be slower as Jolly Groceries becomes known in the community. Within six months, the Company plans to double its average monthly revenue to coincide with the busy winter and holiday months.
Jolly Groceries will mix local and international (mainly Middle Eastern) produce and grocery products. This includes departments for Halal meat, general grocery, nuts, deli, and bakery.
The Company is planning to stock popular, reliable brands of Middle Eastern grocery items, including: 1&1, San Remo, Sadaf, Krinos, Badr, Golestan
To offer customers the best possible prices, Jolly Groceries will purchase from several reputable wholesale suppliers, including: Krinos Food, San Remo Rods, M&H, Baloot Bakery, Saman Bakery, Van Whole Produce, Fresh direct
To ensure a good mix of local and imported products, we will also offer locally grown produce, including Ambrosia apples, tomatoes, berries, and beets.
The grocery store will open in June 2022 in the trendy Downtown New York community of Brooklyn.
Business Address: 120 Tanker Street, New York, BC
The owners choose this location due to its proximity to a main transportation route in and out of the downtown core. Its corner location includes large windows to entice and attract people from anywhere in the intersection.
The purchase of this location includes over 10,700 sq ft:
- 7,000 sq ft of retail space
- 800 sq ft office space
- 1,200 sq ft prep room
- 2,700 sq ft storage room
In addition to spending $350,000 on renovations to the existing space, Jolly Groceries plans to make the following purchases:
- Walk-in cooler and freezer: $18,000
- Lightning: $14,000
- Security cameras: $6,000
- Security alarm system: $7,500
- Shelving: $80,000
- Prep room equipment (scales, sealer, label printer, computer): $7,000
- Cashier station (software license, computer, scale, printer): $16,000
- Freezer (purchase and installation): $32,000
- Fridge (purchase and installation): $90,000
The Jolly Groceries location includes 7,000 sq ft of retail space for inventory and a 2,700 sq ft storage space. The stock kept on-site will change seasonally and will be purchased based on demand.
Initially, the Company will use $180,000 from the SBA Loan Program to purchase inventory for opening.
4.3 Health & Safety Guidelines
As a grocery store, all employees and Company will always follow WorkSafe NY guidelines, local laws and bylaws, as well as any particular recommendations and regulations by Public Health. This includes:
- Federal Government food safety laws
- New York Provincial food safety laws
- Local municipal legislation
5.0 Market Analysis
The need to buy groceries isn’t going away anytime soon. However, how and where consumers get their produce and groceries is changing. During the global COVID-19 Pandemic, grocery spend increased by 12% as expected. However, the industry is preparing for a -7% dip in 2021 as the economy reopens and many consumers start eating in restaurants again. This drop will be short-lived until 2023 when the market shifts back to a growth phase.
IBISWorld predicts that supermarkets and grocery stores will begin increasing their stock of ethnic foods over the coming years as the immigrant population in US grows:
“In addition to organic foods, IBISWorld expects supermarkets and grocery stores to increase their stock of ethnic foods. US is culturally and ethnically diverse, with a large immigrant population from Europe and Asia. As immigration is expected to be the primary reason for overall American population growth, demand for ethnic foods in US is expected to increase over the next five years. Consequently, industry participants that devote more retail space to ethnic food products are anticipated to outperform their competitors over the coming years.” IBISWorld
Supermarkets & Grocery Stores in US (NAICS Report 44511CA)
Industry profits are expected to remain relatively stable over the next five years. A key driver for future earnings in this market is the projected increase in consumer’s disposable income. In addition, Americans are becoming more health-conscious. There is increasing demand for specialty produce and products to cater to niche foods, high-end foods, organic items, gluten-free, and non-GMO foods. These products often come with a higher sticker cost, so as disposable income increases, so will spending on these items.
IGA Food Stores
5.2 Competitive Advantage
One of Jolly Groceries’s most significant advantages is that its prices are lower than most of the Company’s competitors. Competitors mark up most products by 2x, whereas Jolly Groceries will only be 1.5x. This extra 0.5 % savings can be passed on to customers.
Other key differentiators include:
- Always fresh produce: If it’s not fresh or expires before it’s purchased, it will be taken out of the store’s retail area.
- Unique Middle East Products: The Company plans to sell specialty Middle East grocery products that you can’t find anywhere in Downtown New York.
- Focus on Quality: The Company will provide high-quality fresh produce and provide quality customer service as the neighbourhood grocer.
5.3 Risk Analysis
Risk: In a business that provides fresh produce and groceries, rodent control is paramount. Rodents on the premises could mean being shut down by Public Health and could cause health issues.
To mitigate this risk, rodent traps will be installed in inconspicuous areas of the shop, and fresh produce will be covered overnight.
Risk: The summer months and November through December are commonly busy times for grocery stores. Jolly Groceries expects to see higher revenue during these months. In the lower revenue months, the Company could experience cash flow irregularities.
To mitigate this risk, extra profits from the busier months will be saved to cover costs during the slower months if necessary.
Risk: Retail stores are at risk of being hit by vandals and thieves. Stolen goods and damage to the property can be expensive and tarnish the reputation of the business. It can also put the safety of staff and customers at risk.
To mitigate this risk, Jolly Groceries is installing state-of-the-art security cameras and alarm systems in the shop. These measures are likely to deter or eliminate any thefts or break-ins.
Risk: Improperly managed stores risk stock building up faster than it can be sold. Excess stock not only creates a mess in storerooms but can also expire more quickly than it can be sold, leading to un-saleable merchandise and a loss of profits.
To mitigate this, the Company is using the expertise of both partners who understand the buying cycles of grocery products to reliably predict when to reorder products to minimize overstocking and storage complications, especially when it comes to fresh groceries and produce.
6.0 Sales & Marketing Plan
The Brooklyn area of Downtown New York, where the shop will be situated, has a growing Iranian population. People and families from throughout the Middle East (including Turkish, Iranian, and Arabic) also live in the nearby neighbourhoods of Olympic Village and Chinatown. The store’s primary target customer will live within 20 km from the store, but those from outlying communities who come into the city for work may also stop by for groceries on their way to or from work.
As much as they love their new home in the US, they have a deep love of the food and grocery products from their home countries. And, when they have relatives visiting from back home, they want to show them that New York has some of their favourite foods.
Some of the foods they find challenging to buy in New York include some authentic dried fruits, dates, spices, herbs, teas, and fresh vegetables. Now that the pandemic is nearly over, their disposable income is increasing, and they can afford to get these specialties from the grocery store again.
Family is a key value for Jolly Groceries’ target customers. They enjoy eating great food with their friends and family. They may also want to introduce Middle Eastern specialty meals and foods to their American friends.
The customers living in Brooklyn are also craving more local choices for fresh produce, regardless of their ethnicity. The store will cater to that need in the local neighbourhood.
6.1 Key Channels
While a large portion of Jolly Groceries’ customers will be walk-ins who pass by on the street from the local neighbourhood, the Company will also be engaging in several marketing tactics to attract customers and keep them up-to-date about the business.
Social media will be a primary channel, and Jolly Groceries will start with a Facebook Business Page and an Instagram account. The primary goal of these channels is to build up a sense of community by sharing valuable information about the store and community. Mr. Wilson will manage these accounts.
Jolly Groceries will also create a Google listing, so the Company appears on Google Maps. The Company will run Google Ad campaigns to target more specific and localized demographics.
Print flyers and ads will be created and distributed through US Post to local residences in Jolly Groceries’s target neighbourhoods.
6.2 SWOT Analysis
7.0 Financial Plan
7.1 Income Statement
7.2 Cash Flow Statement
7.3 Balance Sheet