3 Ways to Triumph Over Labor Challenges

Cost management is as pressing an issue as ever for supermarkets. Not only is inflation causing sticker shock among consumers, but labor struggles are leaving retailers searching for strategies to increase efficiency while operating with smaller staffs.

Finding ways to streamline operations is crucial to success both now and in the future. With grocery continuing to see sales increase across the store, implementing strategies to boost efficiency and address labor challenges is a wise investment now and when the labor shortage eases.

Here are three best practices to reduce labor demands and boost margins.

The fresh perimeter is a worthy focus for optimization for multiple reasons. Not only do categories such as produce, deli and bakery feature foods with shorter shelf lives, but fresh departments are also a current locus of outsized growth. In fact, more than 60% of retailers say they’re stocking more refrigerated and fresh products to keep up with demand, according to BevNET.

These factors consequently create a higher labor requirement for the perimeter, too, as a number of variables must be considered for buying and reporting inventory in fresh categories. Shelf Engine’s      intelligent forecasting and automated ordering is one way retailers are reducing their labor spend in perimeter categories while achieving sales growth at the same time. Saving an average of $237 in weekly labor savings per store in the produce section alone, Shelf Engine boosted YOY produce sales by 26% and deli sales by 20% for a national grocer.

Eliminating the need for employees to attend to more cumbersome tasks, such as reporting on sales and scanning out waste, can help alleviate labor challenges for busy stores with fewer experienced employees. This means that workers can spend their time where it’s needed most—offering great customer service that keeps shoppers coming back to the store.

Leveraging an AI solution to automate arduous tasks also helps to ensure data accuracy, even for metrics that are historically difficult to quantify, such as waste. According to Shelf Engine, grocery shrink is often more than 160% higher than reported, and shrink discrepancies are found to occur more than 75% of the time for both large and small grocers. More accurate data, in turn, yields more accurate forecasts that produce more accurate orders—a virtuous cycle.

Investing in AI solutions is among IRI’s list of Seven Strategies for CPG Growth in 2022. Automatic machine learning and analytics, the report argues, can allow for real-time price management, a deeper understanding of consumer price sensitivity and a more focused use of promotions. These insights enable retailers to act on shoppers’ of-the-moment needs, affording their stores a competitive edge.

Beyond addressing operational challenges in the store, automation can help reduce stress, improve employee retention and simplify the training process for new hires. For these reasons, retailers who use Shelf Engine save an average of five hours of labor per store, per week, per category. As employees redirect their work hours away from placing orders and, marking down product and scanning out waste, they can instead focus their talents on providing differentiating customer service and great experiences for shoppers.

Shelf Engine’s advanced order automation goes beyond saving labor and reducing shrink; Shelf Engine eliminates inventory risk for retailers by paying suppliers for everything they deliver, yet only charging retailers for items verified as sold through their POS system. To learn more about how Shelf Engine increases gross margins by 50% on average, reduces costs and drives sales, click here.