5 Key Factors for Cost Control in Supermarket Management

The context of recent years has led to price increases that have had a direct impact on the grocery basket. According to data from the National Statistics Institute reported by the financial newspaper Cinco Días, the average year-on-year increase in 2022 was 8.4%, with a particularly significant rise in food, whose year-on-year price soared by 15.7%.   

The economic slowdown, high interest rates and rising energy, oil and raw material prices are behind a situation that affects both consumers and businesses themselves. For the latter, it is essential to take measures aimed at maintaining profitability. Cost control in supermarket management is one of the most efficient measures. 

What Should You Know About Cost Control in a Supermarket?   

In a situation where supermarket profit margins have been reduced, identifying which expenses can be reduced or eliminated without losing service quality, taking preventive measures against unforeseen events and mitigating the risk of workplace accidents are key aspects of business management. All of these are part of cost control. 

It is important to bear in mind that there are a number of necessary expenses that will be recurring:

• Premises rent
• Employee salaries
• Utility costs
• Administration
• Insurance payments. 
• Security
• Protective equipment for employees.

Alongside these, there are unforeseen expenses, such as those involved in repairing broken machinery or the indirect costs of replacing an employee who is on sick leave. Both can be adjusted according to specific needs, while it is also highly beneficial to identify and eliminate expenses that do not add value to the business.

At this point, it is important to have tools capable of measuring processes and improving them based on the data received. This is because cost control involves optimising every aspect linked to the business. Increasing employee efficiency and productivity is essential to achieving this, as are improving supplier relationships and inventory control. 

Factors to Consider in Supermarket Cost Control

The study Impact of Cost Increases on Prices in the Fast-Moving Consumer Goods Supply Chain, produced by the Andalusian Confederation of Food and Perfumery Businesses, notes that rising structural costs have caused the net profit of businesses in the sector to decline significantly over the past year. Although consumers are facing a considerable increase in food prices, not all of the increase is passed on to them; businesses are also heavily affected.

Experts agree on the need to carry out a proper analysis of the situation, planning objectives based on a prior budget, assessing which costs can be reduced and how to do so, and adapting the corrective measures that are determined. Based on these principles, there are several factors worth knowing that are essential for supermarket management and cost control. 

1. Managing Employee Shifts  

Employees are the visible face of any business, and optimising their activity is essential to achieving profitability. In a supermarket, customer flow and sales volume vary depending on the time and day of the week. Proper staff shift management ensures that labour costs are linked to the needs of each moment. 

In addition, employee wellbeing is directly related to productivity. Setting shifts according to workload will improve the efficiency of their work and, consequently, their satisfaction as well as that of customers. 

2. Employee Protection

In 2022, according to data from the Workplace Accident Statistics compiled by the Ministry of Labour, 67,435 workplace accidents occurred in Spain in the retail sector, to which supermarkets belong. Back injuries, falls, stress and hypothermia are the most common causes. 

Absences caused by these events involve a significant cost for supermarkets, which are forced to restructure departments or hire new professionals. Carrying out a risk assessment in a supermarket reduces the incidence of these accidents. In addition, providing employees with professional equipment that protects them from potential incidents, such as Shoes For Crews slip-resistant shoes, helps mitigate risks. 

3. Analysis of the Most Profitable Product Lines and Inventory Management

Having detailed knowledge of sales data and consumer trends is a fundamental tool in supermarket cost control, since investing in products or business lines that do not generate profits can negatively affect results. 

At the same time, it is important to optimise inventory management, monitoring the supply of perishable products, being very clear about expiry dates and avoiding running out of the most in-demand items.   

4. Use of Technology and Process Automation

There is a wide variety of technological tools capable of managing and automating a supermarket's accounting, personnel and inventory data. Relying on them is an excellent way to avoid spending time on tasks with no added value, increase productivity and prevent possible human errors.    

5. Negotiating with Suppliers

Those responsible for supermarket management must stay informed and up to date on market conditions and trends and, based on the data collected, reach agreements with product suppliers that benefit both parties. This is one of the most important costs for a business, and its management is key to overall results. 

Having the best professional equipment, which provides your workers with protection during their working day, is also a fundamental part of supermarket cost management. Shoes For Crews footwear adapts to your team's needs and reduces the most common workplace risks in a supermarket. Would you like more information and to find out how it can have a positive impact on your business? Contact us!