The fresh departments of a grocery business have become a high sales, high growth part of the store. Since these departments normally provide better contributions than the dry departments there is quite an incentive to grow their sales whenever possible. There are many things a grocery retailer can do to increase sales in their fresh departments. Company’s can reduce their prices, increase their ad exposure, bring in more inventory, hire an agency for a sampling program plus many other sales driving tactics. A defining feature of most tactics, including all the ones mentioned above is they require some level of investment. In some cases that investment could be significant enough to make a measurable impact on profitability. Clearly, if you have an objective to drive sales in fresh in the hopes of improving total store profitability then preserving profit is as important as driving sales.
Easier said than done, right? Perhaps not. A great way to drive incremental sales, particularly in the fresh departments is to begin a get clean regimen. Having clean, fresh departments bring lots of benefits over and above merely driving sales. Clean departments harbor a lot fewer germs, this is obvious, but what is not necessarily obvious is that germs get into fresh foods on display and into the staff members required to work the displays. Germs on food translates into shrink and germs on employees translate to sick days. Both are situations a grocery retailer would like to avoid.
But the best reason to get clean in fresh is because it drives sales. This may not be completely intuitive. After all, customers choose their stores based on location, price and ads. This is true.
Location is an important determining factor for customers’ shopping decisions. The problem is once you’ve built a grocery store, you generally cannot change its location. Price and promotions are also important, but as mentioned above, driving for incremental sales using either price or promotion can be quite costly in terms of profit investments. So where does that leave cleanliness and product quality? According to a 2014 Nielsen Global Survey 39% of customers around the globe choose their grocery stores based on cleanliness and 55% make this choice based on product quality. The same study showed that North American consumers also find these attributes important scoring 28% and 43% respectively.
The most exciting part about getting clean is it does not require a major investment. How many ideas out there can improve customer satisfaction and by default increase sales without requiring a large investment? That is not to say that getting clean in the fresh departments is easy, it just does not require a major investment. It will require an iron clad will, a lot of discipline and a real great process improvement project. There are reasons why stores cannot keep their departments clean and depending on the processes already in place those reasons will be different by company. Understanding the interdependencies between store processes is important in order to implement any new get clean regimen. The best way to gain that understanding and properly implement your regimen is to take the business through a rigorous process improvement plan like six-sigma or other similar approaches.
Good luck getting clean and driving sales in your fresh departments!
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