Most grocers believe that focusing on their primary shoppers and offering products they want to buy, at fair prices and treating these customers with lots of tender, loving care will be the key to successful growth. The NGA (National Grocers Association) researched what is important to the shopper. In the 2010 Consumer Survey Report done by the NGA, 46% of the shoppers surveyed stated they would like to see their primary grocery store improve on price and cost savings. Some of the other items that ranked in this survey are:
41% - More locally grown food
30% - More variety/better assortment/wider choice
22% - More fresh made food
22% - Better customer service/employees
Creating a positive shopping experience and creating the perception of value in the customer's mind, will be the absolute key for traditional supermarkets to succeed in the marketplace. Ideally, retailers need to know who their customers are and what they want.
It’s recommended that once a year an AP audit should be performed by a third party. This audit will catch the following:
• Deal pricing front and back loading
• Varying price by location
• Credits paid as bills
• Deals not offered
While you typically give up 50% of the findings, you can use the DSD Audit report to plan and train for the current year to prevent similar findings the next year. This process is a must in order measure the effectiveness of the receiver, buyer and accounting department.
Each year a goal should be set to reduce the findings by the outside auditor. You will know you are effective when the outside auditors don’t want to return because it is unprofitable for them. This is a sign of success.
Deal Pricing and Costs
While a 3rd party DSD audit will identify the issues mentioned, controls need to be established to insure that vendors are not loading in before or after the deal and costs between stores are valid. These functions can be accomplished via accounting, operations and your purchasing department.
• Proper pricing files should be maintained in the DSD system.
• Accounts payable should sort invoices by vendor (periodically if another sorting system is used) and look at pricing for the same item between stores. Sometimes different pricing is acceptable due to different distributors. However, if it is the same vendor, the lower cost between stores should be taken in all stores.
• Operations and merchandising can work together to police deliveries. Look at the ad items in advance. Are vendors loading in before the deal period? Have the store managers talk to drivers and let them know that this behavior is unacceptable. If it continues (besides deducting money from the bill) call the regional manager of the distributor and let them know what the route driver is doing. In short, let them know that you are watching.
Someone who is not directly involved in the process should perform a periodic audit of receivers and vendors. Do not use your alternate receiver or receiving manager. It is a simple yes no audit and results should be reviewed for any weaknesses.
The back door should be locked during all hours except hours that the door is manned by the receiver. (Please note, if this is an emergency exit, check with your local fire department or building inspector to determine if alarmed panic bars are acceptable.) The back doors should not be left unlocked for smokers or a cool breeze. Trash should be removed in clear trash bags (ideally, a locked compactor would be used with secure access from inside the store.)
The above are general receiving practices and do not address the additional security required for items such as cigarette and alcohol deliveries. In addition a review of proper pricing and deal reconciliation is contained in a separate document. The above policies, coupled with a periodic operational audit and a 3rd party AP audit, will insure you are protecting your back door and your store operations and assets.
Advertising - It is everywhere. Advertising is on all forms of media and you see it from the time you wake up until you go to sleep. Most POS systems provide the functionality to place advertisement on the customer display. You may have the ability to place and change the pictures displayed on the customer display screen to further help you advertise to your customers in conjunction with the in-store signage.
Promotions - Everyone likes to get a deal. Promotions are great ways to gain new customers and create customer loyalty. However, it may take a little planning and creativity to come up with promos that benefit both you and your customers. We suggest that you don’t make the promo too complicated to understand. After all, the goal is to reward your customers for their loyalty.
Reporting - Arguably, the most valuable part of your system is the information gathered from all the transactions. What could you do with all that data? You could run reports like the basic daily sales and movement reports to comparison sales reports between this year and last year. Other options include reports that could help you with theft prevention and data-mining customer shopping patterns. These are just some functions and features that you could utilize to improve your bottom-line. Other functions and features which may be available include: deli scale management, ad-planning, price optimization and electronic signature capture.
If you would like to learn how you can get more out of your POS system and learn how to use any of the above functions or just want to know if something can be done, please contact STCR Business Systems at (607) 757-0181.
The most important factor to effective receiving is a well-organized receiving area. This organization will prevent confusion and insure all products are adequately checked in, credits are received and vendors are monitored. This well defined receiving area can be accomplished using the following techniques:
Set up two defined areas on the receiving floor
One defined area will be for the vendor whom you are physically receiving. The second area is a staging area for the next vendor who will be received. All other vendors should wait outside of the store for their appropriate turn at delivery. These areas can even be marked by yellow lines painted on the floor of the receiving area.
Set receiving hours
Many times business dictates a wide receiving time. However, a range should be established. The range of hours should be set so there is a qualified receiver at the back door during those hours. This will insure that proper procedures will be followed when product is received.
Note: exceptions will always occur but should not be the standard. For example, if you are awaiting merchandise on sale and the driver is late, you will probably want to make an exception. However, if you are not in direct need, reject the delivery and set the tone for the driver and the company.
Damages and other credits
Assign an area by the receiving door and use old banana boxes or crates for alphabetical separation of vendor’s damages and credits. All products that are damaged or require credits will be neatly separated and containers cleaned if necessary to prevent rodent and other health issues.
Before vendors are received, all credits should be verified and counts made to insure proper credit. Credit should be received at full cost and retail and not a reduced cost and retail from the current weeks pricing, if applicable.
Proper receiving and counting
When the product arrives from the vendor, the product count needs to be verified for accuracy.
Improper Check in: “Hey Joe, I have ten to a layer and 12 trays on the rack.”
Receiver, “Ok go ahead.”
Proper Check in: “Hey Joe, I have ten to a layer and 12 trays on the rack.”
Receiver, “Hang on there, let me count what’s on each tray and check to be sure that it is the right product and quantity.”
All of us develop relationships with people over a period of time and we tend to offer favoritism to those we begin to know and trust. Rotation of receivers can identify problem vendors and prevent collusion or fraud.
Vendor violation tracking
Keep a list of each infraction a vendor has; shortages, unauthorized items, etc. Some companies go as far as fining the vendors for each infraction. Keep track of those vendors and more specifically those drivers that have violations. Look for patterns, report drivers and request a new route person or threaten fines if the track record continues. Use this violation list in conjunction with the receiver rotations to discover problem receivers. If receiver “A” never has infractions on a vendor, but receiver “B” always has infractions, you may want to audit receiver “A” from a distance to insure your procedures are being followed. Camera systems can offer a great tool to watch receivers and insure they follow policy when they do not know someone is watching.