Where are the costs hidden?
What is it that drives food retailers? Where are cost drivers or time wasters hidden? POS TUNING investigated this question with the EHI Retail Institute.
Good staff are rare and cost food retailers a lot of money. The relevance of this issue should not be underestimated. If there is a lack of staff on the shop floor, things remain undone and, in the worst case, this has an impact on customer satisfaction. This means that staff contribute to the success of the supermarket, but are also a cost driver. Around 13% of sales must be budgeted for staff in supermarkets.
Another, if not the most important aspect of the study, is the issue of working hours. If there are fewer employees, the work to be done has to be divided among fewer colleagues. However, this also means that there is less time available for individual areas of activity. The workload will not decrease and the lack of staff is already a reason for reduced opening hours.
Handling goods takes time and puts a strain on retailers’ budgets. An exciting result of the study is the comparison of the time spent in the different product groups of the individual stores. It turns out that one store needs three times as much time for goods handling as the best store in the comparison group. Intelligent organization of handling could save a lot of time here. A must in view of the fact that fewer and fewer staff are available. And (as a result) it also reduces costs.
An initial closer look at the figures makes it clear that the frozen food category is the category that appears to be the easiest to maintain. Just under 2% of the weekly hours are spent on optimization. The situation is quite different for the fresh food and bakery counters: At 27.4%, this is where the majority of the required weekly hours lie. The checkout areas are close behind with 20.5% of weekly hours. According to the EHI, the figure for dry goods is only 15% and all other areas account for less than 10% of the hours spent.
The EHI has also broken down how much time is needed for which activity in the individual areas. Restocking and product care in the fruit and vegetable category takes up 82 hours a week. However, stocking and restocking of fresh produce and price labeling take up the largest share of time at 69 hours. However, if you look at the amount of time spent checking, repacking and transporting items in the store — or incoming goods — it is noticeable that the proportion of hours here is remarkably low. Just 6.5 hours are spent on replenishment/inventory, including stock correction.
Various individual factors influence which activities in retail can become a time waster and therefore also a cost problem. The problem of staff shortages is one explanation for the shift in priorities on the list of activities. If there are fewer staff on the floor, it is not possible to devote as much time to stocking goods. However, this also means that out-of-stock situations can sometimes occur. This then leads to a loss of quality at the point of sale. And that has an impact on customer satisfaction.
A lot of time and costs can be saved by optimizing work processes in goods handling. This can be achieved with a suitable system. POS TUNING’s organization systems can be used for almost any category and save staff both work and time. The stocking of goods is less time-consuming and the shelf maintenance faster as there is no need to pull products forward. If retailers want to take the results of the study as an opportunity to address the time and cost issues, they cannot avoid looking at optimizing shelf and merchandise maintenance. Once they have made this investment, it will pay for itself within a short time. And this then pays off in terms of customer satisfaction.
