Making your store work harder for you
With the National Living Wage due to increase to £9.50 in April, and electricity and gas prices sky rocketing as we head into winter, many retailers are wondering how they’ll continue to make convenience retailing a viable prospect.
Staff are recognised as the biggest overhead many of us have and they are often our greatest asset. We all agree that our staff should be paid a respectable wage, but with a 6% increase looming, where will the extra money come from?
Most customers know how much everyday essentials are and will often shop around when prices go up to find the best deal. They are also savvy when it comes to promotions, which are often tight on profit margins, so simply putting the prices up or scrapping promotions doesn’t bode well for continued healthy footfall.
Shrinkage is another major drain on the bottom line. How good is your security policy? How often do you check gaps and balance lottery stock? How much stock is simply walking out of the door without being sold, and how many stock losses are down to bad date rotation and slow sellers? Be honest and keep a diary. Calculate how much your business is losing on a weekly, monthly and annual basis, and put procedures in place to tighten up on any costly issues.
A credit and debit card facility is a must with so many customers wanting to pay by card, but providers often try to blind us with several different percentage rates and often gloss over the authorisation fee. This is charged each time a card transaction is made and can be as high as 5p. The authorisation fee often accounts for 50% of your monthly charge so must be competitive. Ask what the fee is and if it can be improved.
Finally, what profit are you making at both ends of the day? Looking at your turnover might seem like ‘Open All Hours’ is a viable prospect, but until you drill down and look at what you’re actually selling first thing in the morning and last thing at night, you can’t be sure your customers are paying for your staff to be there.
Tobacco and PayPoint sales alone won’t justify the profit needed to keep the lights on and the staff there. Can you enhance or introduce food to go to your early morning customers to boost profit margins and is it worth closing earlier to trim the wage bill into a healthier shape?
Making your store work harder for you is much more rewarding than you working harder for your store.
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