By most accounts, the grocery industry did very well in 2020, as government-imposed lockdowns across the country shuttered all but essential businesses.
As local officials pursued supply-side destruction to “stop the spread,” supermarkets prospered with their “essential business” designation.
Large and/or national supermarket chains such as Walmart, Target, HEB, Trader Joe’s, Wegman’s, Amazon, and Aldi’s scored very high in dunnhumby’s recently published “Retailer Preference Index”.
(The RPI tabulates scores for primary drivers (price, quality) and “value amplifiers”, such as digital capabilities, speed, convenience, and discounts & rewards.)
During the pandemic, however, speed was a strong, if not primary, driver of market share. That made smaller, regional, and independent grocery stores attractive options for consumers, as they equated speed with safety.
The shorter the dwell time, the safer one felt.
Consequently, these stores cashed in with record financial performance, as price and quality considerations (otherwise known as the dunnhumby “value core”) took a back seat.
But, longer-term, the challenge for most grocers will be that their collective pandemic gains will eventually recede in the coming months, as vaccines rollout and Covid infections trend down.
Importantly, operators will continue to absorb increased labor spend associated with both the shift to on-line (BOPIS et al), as well as keeping stores safe and sanitized for both shoppers and employees.
Minneapolis-based Cub’s Foods CEO, Michael Stigers, opined, “All of the learned protocols and practices will be in place for the foreseeable future. This is a multiyear, if not a multigenerational experience.”
These two headwinds (labor expense and flattening sales volume) are going to intersect with the push for a federal minimum wage of $15, spelling trouble for regional grocers trying to compete with the RPI leaders mentioned above.
So what can these smaller retailers do to remain competitive? They must not only score well in the value core of price and quality, but they have to do so while investing heavily in store cleanliness to help shoppers feel safe and comfortable.
It goes without saying that food markets will not be able to pull back on cleaning protocols for a long time. And cleanliness will impact a grocer’s brand reputation, shopper stickiness, and ultimately, profitability.
One could deploy “disinfectant” robots, as Ahold Delhaize has done, but man, that takes a lot of capital investment.
So, what else can be done?
Perhaps a less costly way is to free store managers and field management from time-consuming, laborious follow-up inspections of the shopping floor, kitchen prep area, restrooms, parking lots, and storage areas.
And here’s the thing. Store management could then focus on generating sales volume (think new food concepts, services) to better align store operating expenses with overall sales.
Empowering store associates and managers with digital task completion software can free up managers’ and auditors’ schedules to focus on ways to grow the business and outmaneuver the local competition.
With software from Jolt, operators can instill a culture of team accountability. Digital task lists can be quickly crafted and implemented - and managed for compliance with an easy-to-use tablet-based app that ensures that tasks are done the right way, at the right time, by the right person.
Imagine (if you will) - no more paper-based checklists. No more “pencil-whipping” through a piece of paper on a clipboard. No more misunderstandings. And full compliance to job expectations!
For grocerants, consider the possibilities of getting rid of paper logbooks like Redbook, and replacing them with an intuitive tool to digitally record food temperatures as a permanent record?
Food safety auditors could then actually focus on data pertaining to food quality, instead of trying to cajole workers to update logbooks manually in real-time. They know when a logbook has been filled with invented data after the fact, they just can’t prove it. This becomes a non-issue with Jolt!
And, while on the subject of labor-saving tools--How many labor hours might you be able to save with a’ print anywhere anytime ‘ customizable “create labels on-the-fly” labeling solution to replace manual written labels or “day dots”?
In closing, the pressure on regional and independent grocers is mounting, and the storm clouds are gathering on the horizon.
They must commit to the value core of price and quality, while also maintaining rigorous sanitation and disinfection protocols- all while facing the prospect of a precipitous rise in the minimum wage across multiple markets. The sanitation piece will require additional labor hours for the foreseeable future- again, unless you consider robots, of course.
Technology that is purpose-built for the deskless in-store employees( and managers) will help organizations address these ongoing labor management challenges that will sorely test regional and independent operators well past the pandemic.
I invite you to pick up the phone and call the operations execution experts at Jolt. You will be glad you did.