Inventory management and profitability

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Earnings leaders, the top 25th percentile of independent grocers when it comes to pre-tax net profits, increased their pre-tax net profits by 9.8% in 2021 – twice the total average, according to the new 2021 edition of the ‘Independent Grocers Financial Survey, a joint study between the National Grocers Association (NGA) and FMS Solutions.

Common characteristics of profit leaders include strong management of shrinkage, labor, margins, and expenses. The stores’ total gross margin among the profit leaders is 1.6 percentage points higher than the pack. All of this led to benchmarks of record financial and operational performance in a banner year for the $253 billion independent supermarket industry.

The main contributors were dairy products and meat. Strong demand led to increased inventory turns, averaging 19.2 times per year, and shrinkage to 2.5%.

While continuing to respond to an extremely challenging external environment, the independents also focused on reinvesting their record sales and profits into their stores, online capabilities and employees. Based on lessons learned from previous years’ profit leader studies, reinvestment in the business is key to future success.

NGA President and CEO Greg Ferrara noted that as the supermarket industry continues to face change, independent grocers are in a unique position to find innovative and creative ways to better serve their clients.

“The independent community grocer has been instrumental in the food supply chain throughout the pandemic and has been reinvigorated within their communities even as restaurants headed into the new normal,” he said. he declares.

Advances at store level

In the retail industry, many changes are happening, with the desired goals of making the consumer experience more seamless and lucrative for everyone.

ShopRite is the first East Coast grocer to unveil the new QuickCollect GO! POD, where shoppers can pick up their ShopRite grocery orders online from a temperature-controlled outdoor pickup pod for a quick and easy, contactless, self-service pickup experience.

ShopRite is the registered trademark of Wakefern Food Corp., a retailer-owned cooperative based in Keasbey, NJ, and the largest supermarket cooperative in the United States. With nearly 280 ShopRite supermarkets located in New Jersey, New York, Pennsylvania, Connecticut, Delaware and Maryland, ShopRite serves millions of customers every week.

The QuickCollect GO! POD is a smart grocery retrieval system that can hold ambient, chilled, and frozen foods, and customers’ entire grocery orders can be retrieved in one solution. This self-contained pod now available at ShopRite in New Rochelle provides customers with unprecedented convenience for picking up their pickup orders online. The store is located at 8 Palmer Ave., New Rochelle, NY.

“The QuickCollect GO! POD will make it even easier for our New Rochelle store customers to pick up their online orders,” said Steve Savas, president of Shop-Rite Supermarkets, Inc., which operates ShopRite stores in New Jersey, Pennsylvania and across the Hudson Valley and Capital Region in New York. “It’s self-checkout and pickup for online orders that are done right outside the store. We are thrilled to be the first grocer on the East Coast to have this technology. »

The QuickCollect GO! POD is revolutionizing online pickup with robotic automation that enables secure delivery and collection of online orders at any time. The first bins start being distributed to the customer in less than a minute, reducing the time customers wait to pick up their orders online.

Developed by Bell and Howell, a leading provider of automated e-commerce collection solutions, the QuickCollect GO! POD uses next-gen automation and smart software to prepare orders placed on shoprite.com for pickup. It holds orders securely until the customer picks them up with their unique pickup code. When the items are ready, customers receive a text containing a QR code to scan on the console screen, which brings the order to the customer pickup portal, allowing them access to their pre-ordered groceries. The intuitive interface and consumer-focused designs facilitate touchless, quick and easy experiences. Innovations like the QuickCollect GO! PODs are essential for driving trend progression and providing customers with the convenience they expect from e-commerce.

“Retailers like ShopRite recognize that consumer convenience and fulfillment efficiency are critical for the next level of e-commerce. Our data shows that consumers appreciate the convenience of this new automated curbside individual pickup with our QuickCollect GO!POD,” said Larry Blue, President and CEO of Bell and Howell.

The evolution of the online role

Tech startup Farmstead has partnered with national real estate companies and several national last-mile delivery services to create the first end-to-end, same-day e-commerce operations solution for grocers. Farmstead’s Grocery OS solution now includes everything a grocer or retailer needs to set up a black store delivery operation in just two weeks, including:

  • Grocery OS API for writing and centralizing customer orders in dark stores (and optionally retailers’ existing stores) from retailers’ own apps and third-party marketplaces
  • Warehouse space purchased through national real estate giants
  • Optional grocery inventory supply and storage for rapid deployment using the Grocery OS Product Supply Network
  • Grocery OS software stack for managing online order taking, inventory management with an AI prediction engine and automatic sourcing, picking and packing, and customer communications
  • Last mile delivery with guaranteed 2 hour delivery service within 80 km, with optional under 1 hour delivery
  • Optional inclusion in third-party delivery service marketplaces

“Right now, fast grocery delivery comes with steep markups and fees, and Farmstead wants to change that,” said Pradeep Elankumaran, co-founder and CEO of Farmstead. “Grocery OS helps grocers dramatically improve their efficiency, so they can eliminate fees and make money from e-commerce without passing fees on to customers and without relying on expensive third-party services. The Grocery Combination os and dark stores enables faster delivery, a much wider delivery radius and higher profits per order, while customers benefit from lower prices.We have been doing this ourselves for several years and offering it now to other grocers.

Farmstead’s Grocery OS, launched in 2020, was originally a software-only solution. In a pilot project with a major national grocer, Grocery OS was proven to reduce delivery operational costs while accelerating delivery times to less than two hours and significantly improving customer satisfaction. Other retailers have since adopted the solution, most recently Farm Link Hawaii.

“While our Grocery OS software greatly simplified grocery delivery for our customers, we still saw them struggle to bring a unified solution to market,” Elankumaran said. “Our new solution removes these barriers and enables our customers to bring their new delivery operations to market even faster.”

Predictive grocery delivery

Others strive to solve complex distribution problems. Jupiter, the predictive grocery delivery company, recently launched in California, Nevada, Oregon and Washington after a successful pilot in the San Francisco Bay Area. The expansion increases Jupiter’s potential customer base by more than 7 times, with the potential to reach more than 11 million homes in the western United States.

Jupiter is the next generation of grocery delivery, tackling the growing number of hours spent finding recipes, planning meals, and grocery shopping. Jupiter’s goal is to streamline the process, take the pressure off those tasked with putting food on the table, and focus on the pleasures of a well-prepared meal. Customers can shop from an innovative menu created by award-winning cookbook author and food photographer Nik Sharma, former executive chef at Waterdog Tavern Cory Scales, and Martin Sheehan-Stross, former senior sommelier at Michael Mina San Francisco.

Shoppers in these new marketplaces will experience simple, intuitive shopping where they purchase recipes with products added directly to their carts. Based on shopper behavior and preferred ingredients, Jupiter immediately begins to personalize and streamline recipe and product discovery, meal planning, inventory management and grocery delivery all in one place. During the first deliveries, Jupiter will provide fully personalized and automated grocery lists based on meal planning and basic food needs and preferences.

“Today, Millennials and Gen Z control their finances with a tap, the room temperature with their voice, and can parallel park with the press of a button. So why are they still making three trips to the grocery store every week to buy pre-packaged meals? said Anuraag Nallapati, co-founder and COO of Jupiter. “We focus on making recipe discovery fun and provide the predictive grocery delivery service to do just that.”

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