Obstacles Grocery Store Owners Need to Overcome to be Profitable
Grocery stores are essential businesses to communities, but that doesn’t mean they don’t face obstacles on a daily basis that affect profitability. Let’s take a look at some of these challenges you may be facing at your grocery store and how you can overcome them.
Competition From Big Chain Stores
One of the biggest challenges independently owned grocery stores face is the competition from the big chain super stores. They can keep costs low, provide a wide variety of products and have all the latest technology to keep up with changing times. So how do you compete as a mom-and-pop store? The easiest answer, you don’t, at least not in a direct way. Instead, you focus on your grocery store’s unique value and personal service that you provide to your customers.
Start by finding something that will help your store stand out. Is it your convenient location, knowledgeable staff, unique and local products? Select something that your store can really excel at and market this value proposition in all your marketing efforts.
Change in Customer Behavior
If there is one thing 2020 taught us, it’s that businesses need to be prepared for anything that may change consumer buying behaviors and be able to adjust accordingly. This is especially true for grocery stores who provide essential goods to the community. When the pandemic hit and everyone was advised to stay home and limit contact with others, this caused a big hiccup in going grocery shopping. Many people wanted to use an online order system and have their groceries either delivered to their home or have them brought to their car at the store. If your grocery store didn’t provide these services, it probably wasn’t overlooked by many. If your store hasn’t pivoted to provide these services, now is a great time to get this implemented.
Be on the lookout for new changes in consumer buying behaviors to be able to accommodate them quickly. If your town is putting a focus on being environmentally friendly as a community-wide initiative, your store should look into adding more natural cleaning products and provide recycling services for your customers.
Another way to be profitable at your grocery store is to eliminate unproductive processes that may be eating away at your employee’s time that aren’t productive. One way to determine if your store has these unproductive processes is to ask employees to track their time by task. You may be surprised to find they are spending a large majority of their time applying sales stickers to individual products, when they could dramatically reduce that time with a POS system update and one individual sign in front of the products. Finding these inefficiencies, whether big or small, can really help keep the costs down and see your profits increase.
Grocery stores carry lots of perishable items and if these go bad before your customers purchase them, you immediately incur a loss. So how do you keep this type of profit loss to a minimum? Having a store manager that understands the proper quantities to order so you don’t have too many at the store is imperative to keep inventory loss at bay. This also goes back to consumer habits and knowing when your customers will want to buy certain types of perishable items and adjusting the quantities accordingly to meet demand. Having too many perishables that aren’t in high demand will be a waste for the company. Know your customers and what they want instead of providing them what you think they want.
Does your grocery store need to make some improvements to keep up with the changing times? We’re here to help. Whether you need to invest in new marketing materials, purchase new and exciting inventory for your customers to fall in love with, or invest in more modern services like online shopping, we have the funding available to get your store where you want it to be. We understand the obstacles grocery store owners need to overcome to be profitable. Complete an online application today to see how much you qualify for, with no obligation to borrow. You’ll be partnered with one of our seasoned loan consultants that will guide you through the entire approval process and help you find the best financing option for your grocery store’s needs.