I recently visited my 100th grocery store to continuously learn about this important industry and better enable our company to serve it. What’s clear to me as I speak with these Independent Grocers and read analysts’ opinions, is that these business owners, from small to large, will experience a “softening of consumer traffic” that may or may not return to pre-pandemic levels.
I’ve always believed that we perform to our highest level of preparation and lack of decisiveness causes us to miss important opportunities. These are two (2) important insights for any business. For the independent grocers with 1-100 stores, we should anticipate a softening of sales across the grocery industry and employ methods that hedge against a change in consumer traffic Margins and product movement (velocity) matter most in this industry.
Here are three (3) strategies for Independent Grocers to consider.
Train the Staff
The real value of employee training is perhaps not clearly understood by most businesses. “Training is, quite simply, one of the highest-leverage activities a manager can perform” said Andy Grove (former CEO, Intel and author of High Output Management).
Take this example: Say an Indie has 100 employees, and the owner developed four (4) 3-hour training sessions over a month/once a week. It would likely require 4 hours of preparation time for each session. In the 12 months following that training session, those 100 employees will accrue 192,000 hours (assuming a 40-hour work week). If your training efforts result in a one (1%) percent improvement in those employees’ performance, your company will gain the equivalent of 1,920 hours, or almost one full-time employee, of incremental work as the result of the expenditure of your 24 hours of preparation and training time. That’s an 8x return on your training investment.
Employ relevant technology
There’s an opportunity for Independents to leverage technology and software to make their operations more profitable and efficient. For example, there’s technology that helps reduce food waste and another (please excuse the shameless plug) that untaps profits for grocers without raising prices on the consumer (and just as importantly, without affecting movement).
Software can work to disseminate labor, making employees more efficient by reducing non-customer facing activities and allowing them to spend more time serving customers. “Incremental investments in either technology or software, or both, can make a huge difference in a given retailer’s profitability,” says former Walmart Director of Asset Protection, Brand Elvertson.
Take advantage of tax credits and incentives (C&I)
According to Progressive Grocer, there are various offsets and cash payments available to the Indie retailers who meet certain criteria. One of these criteria include 500 square feet dedicated to fruit and vegetable sales and 500 square feet dedicated to the sale of other perishable goods, including meat, seafood and dairy products. “A significant contingent of grocer’s fail to monetize Tax C&I at all,” according to Laurence Stoksy, CEO of Incentify.
One of the many things I am keen to, is just how busy the Indie really is. Dedicating time to ensure that C&I’s are not being missed is a challenge. It is worth enlisting a tax professional and running through a checklist to ensure money is not being left on the table. Your co-op might help by providing best practices or even 3rd party experts to make this mountain of a task achievable for the Indie.
The pandemic drove an unparalleled, historical transfer of consumer spending from hospitality to the grocery industry. Nothing lasts forever, and the need for Indie’s to explore ways to land softly has never been more important. In addition to ensuring best practices are followed, the three suggestions above will help Indies not only survive, but thrive in what is still an uncertain future. #onlytheparanoidsurvive