Retailers struggling with rising bills must look at all underlying costs to see where savings can be made, a buying group has told betterRetailing.
The advice comes as retailers struggle to find competitive pricing around utility bills such as gas and electricity.
Andy Coultas, commercial manager of Hull-based buying group Procuria, advised retailers to break down costs that were often “off the radar”.
He said: “When I ask retailers what they are paying for milk, bread, gas or electricity, they know. But if I ask what they pay for waste, recycling waste or pest control, they haven’t checked. Outside of those primary utility bills, those costs are not on their radar, and extra savings can be made.”
The buying group works with suppliers that deliver direct to store and service providers.
The buying group’s key areas are milk, bread, chilled, frozen and food to go.
Coultas added that retailers were looking to it for depth of range on a limited number of categories that may not be covered by their primary wholesaler.
He said: “Over the past year, the standout categories have been US sweets and vapes. I have spoken to retailers who have offset rising costs solely by increasing their vaping categories,” he said.
In food to go, slush drinks and hot chocolates have also performed well.
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He added: “Instead of giving five metres to one category, retailers are looking to where good margins can be made and splitting that space more smartly.”
Meanwhile, buying group Gainsmore says retailers should look to drop-shipment buying groups to gain the edge on specialist items.
Patrick Walkington, managing director at Gainsmore, said: “Some categories require much more attention, such as greetings cards, which depend on seasonality.
“These are products that don’t come in the regular trips to the cash and carry, but where retailers can make gains.”
Walkington added that an arrangement where suppliers deliver direct to store affords retailers time that would otherwise be spent collecting items or dealing with invoicing.
He said: “By aggregating that complicated 25% of a retailer’s turnover, we save retailers money and time, and can offer specialist knowledge and range they may not be able to get from the generalist wholesaler.”
Procuria and Gainsmore were both recommended to members by the Fed at the start of the year. A spokesperson for the trade group told RN: “As the cost-of-living crisis continues to bite, saving money is a bonus.
“To help independent retailers cut their costs and to make business easier, the Fed is working with Gainsmore and Procuria to provide members with access to two buying groups.”
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