Running a grocery store is not an easy task, with so much competition involved in this vertical. Independent grocery stores need a new edge against growing competition from both offline as well as online giants. You have to handle the day-to-day operations, hire and train new employees, and maintain their schedules. Besides this, there’s also a need to develop good relations with customers and vendors for a successful grocery business. You will also be responsible for taking care of finances and marketing and need to look after your store’s products and pricing. Overall, a grocery store owner has to juggle multiple things at the same time quickly, efficiently, and precisely. Well, there are a few steps that have to be taken into account for running a successful grocery store and managing a supermarket business.
Addressing 06 critical “How To” Questions:
1. How to write the right business plan for a grocery store start-up?
Before setting up your grocery store, you must write an effective business plan for it. A business plan for a grocery store is a well-written document that illustrates every piece of information related to the business. For a comprehensive business plan, it is crucial to have a deep knowledge of your customers as well as your competitors. Hence, it makes sense to analyse what your customers need and create a database to determine the market size and the right selling and pricing strategy. You should also list out how the business would be making money and how much money can be earned from your grocery business model in your business plan. With the right business plan, the grocery store start-up can be easily managed, and smooth management is vital for the success of the business.
2. How to increase and maintain sales in a supermarket business?
When talking of the supermarket business, success can also be measured in terms of sales. Hence, the key to success in the supermarket business is boosting your sales and providing customers with an experience that they will cherish and talk about! Every retailer would want to know how to maintain supermarket sales in the retail grocery store. Here are some of the ways that can benefit or increase your supermarket sales.
a. Customer Service
To improve your business, receiving feedback from your customers and reviewing it is essential. One must find out ways to solicit feedback and then use the reviews to strategise and increase sales. Regardless of this, it is of utmost importance to identify whether your business is meeting or exceeding your customer’s expectations and needs. One of the ways is to offer incentives. Customers are attracted to good incentives. Hence, to get referrals, you can offer your customers incentives if they refer your business to their friends or family.
b. Analytics
Today, data is floating all around us. By using analytics, the data can be employed to meet the customer’s needs. Analytics help retailers stock popular items and ensure these are easily accessible. Setting clear, short and long-term objectives is the key to improving profits and resource allocation. Analytics could help you achieve your goals within time and with more accuracy.
c. Planogram planning
A planogram graphically represents how products should be merchandised on retail shelves in the supermarket to increase sales. Well-planned planograms can not only help you boost your sales but also reduce the supply chain costs, store-level costs and minimise space wastage. Hence, if you want to improve the performance of your supermarket business, it is important to have a planogram in place.
d. Value Add Services
Various value-added services help to achieve customer satisfaction. Some of the value-added services are:
- Ensure or guarantee on time or faster delivery service
- Recognition and reward campaigns for frequent buyers add value to your brand
- Offer discounts for being outstanding customers and leave an imprint of your brand on their minds
3. How does a supermarket control its inventory?
Want to know how to manage a supermarket inventory? The basis of inventory control is all about keeping a record of stock that goes in and out of the store. Everything needs to be accounted for, be it the items kept in the warehouse, on the shelves of a store, goods that are damaged, broken or used for display. Inventory management covers all these aspects and also the issue of returns. Inventory control is vital for a well-functioning supermarket. Some of the elements related to inventory management are mentioned below:
a. Supermarket Management Software
In the past, hand-written accounts were kept of inventory coming in and stock being sold, but in today’s technology-driven world, management software is available in the market to assist you in inventory control and management.
A supermarket management software effectively and accurately manages and controls stock and can even help with cost optimisation. Features such as barcoding have made the processes very easy and handy. New stock that arrives in the stockroom is simply loaded onto a computer according to its barcode and when the inventory leaves the stockroom, the information is entered into the computer. When a product is sold, the details will be stored in a computer, and the sales will be deducted from the inventory list. The software also keeps a tab of the returned items or damaged goods.
b. Inventory Turnover
Inventory turnover is a measure of the inventory being sold in a year. It is also referred to as “stock turn” or “inventory turn”. Usually, it is calculated every year but can also be used on a monthly or quarterly basis. Inventory management is all about finding that balance and ensuring that you have the right products at the right time at the right place. One of the key metrics that can help you figure all that out is inventory turnover, which plays a critical role in planning and managing your stock.
c. Slow Moving Goods
Logistics in the grocery business would become a lot easier if every item is sold as briskly as milk and bread. When it comes to slow-moving goods, however, the task is not that easy. Slow-moving stock is that merchandise that simply locks up your supermarket`s space and has a low sales rate. Usually, it includes more than three months old inventory. Cash flow is essential for every business to run, especially supermarkets. Slow-moving goods hold back valuable capital of your business that could have been used otherwise. Hence, to run a supermarket smoothly, slow-moving inventories have to be dealt with by finding the cause or consulting an expert.
4. How to attract customers to my supermarket?
Every business needs marketing, so is a supermarket. Supermarkets have been pouring a large share of their income into marketing to increase their customer expenditure. By taking into account customer behaviour and social behaviours, you can successfully market your business venture, which will eventually increase your sales as well as profit. Here are some marketing techniques to look upon in order to attract more customers:
a. Digital Marketing
With everyday innovations in technology, digitalisation has completely changed the customer’s behaviour towards shopping. It is significant for a supermarket business to invest their time in digital marketing, keeping in mind the efficiency, audience outreach, cost efficiency and campaign flexibility.
With an increase in internet penetration rate, digital marketing is the new normal, and it is cost-effective when compared to traditional marketing techniques. It gives you the power to target more people without any geographical barrier. Digital marketing makes the chances of conversion high and helps you generate more sales in your supermarket business.
b. CRM
Customer relationship management (CRM) is a technology for managing all your supermarket`s relationships and interactions with existing customers and potential customers. Intending to improve business relationships, CRM helps companies stay connected to customers, streamline processes, and improve profitability. CRM is a tool that could talk to customers and influence their shopping decisions. It is no less than a secret weapon that can be used very strategically for marketing your supermarket business.
5. How do the supply chains of supermarkets work?
Supermarkets typically have buyers and supply chain managers who track the inventory. When the store inventory starts getting low, that item is added to the list of items to be shipped to the store from the grocer warehouse. For effective working of the supply chain within the supermarket, it is necessary to focus on supply chain management.
a. Supply chain management
The controlling of the flow of goods and services also involves the active streamlining of a business`s supply-side activities, known as supply chain management. It helps the business gain a competitive edge over others and maximises the value to a customer. In addition, supply chain management ensures consistency and ease of operations.
Wholesale grocers usually aid the supermarkets in merchandise distribution while they bridge the gap between product manufacturers, food producers and retailers. Overall, one needs to maintain healthy supplier relationships. Every supermarket must ensure that its supply chain management is as effective as possible because it directly contributes to the success of the supermarket.
6. How to maintain supermarket accounts?
The common issue which almost every supermarket faces is while conducting transactions. Retailers confront accounting challenges all through business. However, rapid progress in software development has changed every aspect of the business, including finance and accounts. Many accounting software for business is available, which ensures more accuracy, stock improvement and cost reduction. This software keeps a record of all business transactions and uses a stock counting method for reporting. Here are a few essentials to look upon for handling accounts:
a. Daily EOD Reporting
Daily EOD reports are updates you send to your manager at the end of each day to highlight what you have accomplished. It helps in time management and usually contains a list of tasks you completed. Writing the end of day reports is a great way to keep your business productive, and to stay updated with the progress.
b. Daily Bank Deposit Reco
The procedure of matching the balance in the supermarket`s accounting records for a cash account to the corresponding information on a bank statement is Daily Bank Deposit Reco. With this process, you can keep track of daily bank deposit records, which is crucial for the business to run efficiently. The goal here is to ascertain the differences between the two and to book changes to the accounting records as appropriate.
c. Petty Cash Management
Petty cash, as the name implies, is small expenditures that are most conveniently made using cash. This fund enables employees to be reimbursed instantly if in case they make any expenditures on behalf of the supermarket. A petty cash management system helps supermarkets ensure that those funds are used appropriately.
About YRC Grocery Supermarket Consultants
Wondering how to run a supermarket business or how a supermarket works? If you want to start an online grocery store or your supermarket retail chain, YRC is the best supermarket consultant you can rely upon! We come with years of in-hand experience in dealing with supermarket businesses and have helped them evolve as a brand. YRC grocery supermarket consultants are going to assist you with every step and would answer every question you have in your mind. Our team of professionals can help you sort every aspect related to running a supermarket, be it digital or offline or omnichannel.
With everyday increasing competition in the supermarket business, a reputed consultancy like Your Retail Coach can keep you updated with the trends and technologies. We guide you at every step so that you can successfully run a successful full-fledged supermarket. YRC aims to bring consistency and prosperity to your supermarket business, and our consultants can help you in streamlining your business operations to ensure maximum efficiency. Contact Your Retail Coach today to make your grocery store and supermarket business a success.