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NEED FUNDING TO BUY EXISTING WELL-ESTABLISHED, WELL-KNOWN SUPERMARKET
Posted by: Andrinette van der Walt on 1/23/2012 8:04:16 AM
Funding Needed:
Above $1mil 		Category:
Retail / Distribution 		Website :
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Location :
All, South Africa 		Viewed : 238 times
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Description:
This Supermarket is located about 140kms from Cape Town and has a 40% market share of the town's retail spending. It was established 20 years ago and has produced excellent year on year growth. Consistant monthly revenues produce a healthy GP of 17% providing for a steady stream of monthly profits. This is a very good example of a well run supermarket which has become a household name in the community.

History Background

This is a manager-run supermarket franchise which services the needs of a large farming community including farm laborers, the wealthy farming elite and the local middle class inhabitants. It comprises a butchery, bakery, deli, green grocer and a dry grocer. A liquor outlet was opened last year which had a very positive impact on the store’s revenues. This is a store which will deliver consistent revenues for years to come. It has a 40% market share of the town’s retail spend with only one other competitor namely an OK Grocer. The Seller bought this store in 2009 and since then revenues have grown exponentially. He has made vast improvements all round which has contributed to this store’s success. A great location on the town’s main street provides excellent exposure. This is one of only 2 fully fledged supermarkets in this town. The store is pretty much a landmark in this town and is very well supported by the locals from all LSMs. It has 3 ATMs which are strategically located in store and attracts locals for their cash withdrawal needs. The town’s post office also rents space from the store which also serves as a draw card for the supermarket.

The only other competition in the area is an OK Grocer store and a few smaller corner cafe shops. The town is not large enough to attract any of the larger chains of supermarkets so a growth in future revenues is assured without the fear that a larger brand will monopolise the town’s retail spend.

A very knowledgeable staff compliment makes for smooth operations. All systems are in place which will enable a smooth transition from Seller to Buyer. This store is located in a “PlatteLandse Dorpie” which has its old school charm, good family values and decent folk as habitants which allows for very little or no serious crime. All the hard work has been done by the Seller and an enormous amount of goodwill and assets accompanies the sale. Shrinkage is at a very manageable 1% of sales. Strict controls are in place which accounts for a GP of 17% after shrinkage and the owner’s personal groceries have been taken into account. This is no doubt one of the supermarket chain's more profitable stores which are located in country towns.

No threats are foreseen in the short to medium term. Unlike other retail operations located in urban areas, this supermarket is strategically located to not only provide customers with their retail needs but serve as a meeting place for the community thereby cementing its position as the town’s premier shopping destination. The medium to short term goal would be to gain the monopoly market share of the retail spend of the town. By installing the DVD vending machine, water purifier, business service centre and the introduction of RSC and other consumer help initiatives would certainly increase traffic through the doors.

This supermarket is a landmark and household name in the town which wiht out doubt will grow into a monopoly if the small enhancements which are stated above are done.

Consistent revenues are produced on a year on year basis with very little down side risk. Located in a country town makes this store attractive with regards to a captive client base whilst capitalising on the tourist influx in high season. Its location in a scenic country town makes the business an ideal acquisition for a family wishing to enjoy a country lifestyle, with above average profits, in a safe and relatively crime free environment. . There is a 1st class middleclass suburb in this town with Model C schools allowing for the Buyer to easily relocate.

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