You might think data and analytics are reserved only for the biggest corporate chains — but that’s simply not the case.
By not using all the tools at their disposal, small market owners risk missing key opportunities, identifying important trends, and discovering more effective ways to keep their store running smoothly.
Here are some common scenarios that small market owners face without an honest view of store performance and inventory.
Tom, a grocery store owner, relies on memory and intuition to manage his stock. Unfortunately, he underestimates the demand for bottled water and cold drinks in July, resulting in empty shelves and lost sales.
Julia manages a small market and is head down in merchandise planning, using her gut to pick out items and come up with discounts. The holidays come and go, and she finds herself stuck with unsold seasonal stock and relatively flat holiday sales with no obvious reason why.
A certain amount of shrink is inevitable, but without visibility into where it’s happening specifically, Laura, the owner of a Hispanic market, doesn’t have a way to notice or curb a high amount of shrink during the spring.
Charlie manages a family-owned butcher shop and deli, pricing items based on rough estimates and tradition. Even though sales have felt steady, the store is still struggling to turn a profit, and Charlie is considering some blanket price increases to offset the loss.
Jennifer manages a small mini grocery that's known for its selection of interesting and uncommon items. Unfortunately, a small percentage of the store's items aren't in the system, causing long lines when cashiers have to go manually check the price of certain products.
See how to avoid these common issues using the reports and dashboards built into a modern POS system.
With an accurate view of inventory turnover and sales, Tom knows that there’s consistently a spike in demand for cold drinks and bottled water every July. He increases his orders in late June, and his shelves stay stocked during the hot summer months.
When it’s time to run a winter holiday sale, Julia doesn’t have to guess. By tracking last year’s holiday sales, her reports show several product categories and specific seasonal items that sold well. She plans her promotions and displays on these items, managing to boost holiday sales by 18%.
Using a loss/shrink report, Laura notices unusually high losses in the dairy department every spring. By adjusting her delivery and training staff, she’s able to reduce shrink in that department by 25%.
Instead of relying on gut instinct, Charlie uses the sales and expense reports on his POS system to understand which product categories net the highest profit margins and which are underperforming. He strategically adjusts pricing for certain items and tweaks his product mix to maintain a healthier bottom line without blanket price increases.
Using a product not found report, Jennifer is able to look at all of the products that were checked out and not in the system that day. After adding the missing product info, checkout is running smoothly and sales increase by 10% during the lunch rush.
Everything you do on your POS system to manage the store — from ringing up customers and applying discounts to creating purchase orders and updating inventory levels — generates thousands of useful data points that you can use to gain an honest, bird’s-eye view of your store's performance.
POS systems can use your product data to make your life easier — but only if that product data is detailed and up to date. When entering inventory, make sure to include the:
This will provide your POS system with the necessary context to generate detailed reports.
Not sure how to use the reports on your grocery POS system? Let’s explore the key reports small markets need access to and how to use them to reduce overhead and boost sales.
Talk with one of our grocery and food market experts today to understand how to take full advantage of your sales and inventory data.
We’ve heard it a million times before: “Sales are up, so why aren’t profits?” Or, in better times: “Profits have been higher lately… but why?”
Total sales numbers can be misleading, especially in grocery stores where every department operates somewhat independently. Breaking down your sales by department and product category (e.g. produce, frozen foods, deli, dry goods, organic foods, etc.) can help you pinpoint the things that are actually making you money.
Here are a few ways that taking a more granular look at sales can help you spot trends and reduce overhead.
Product performance reports aren’t a replacement for your instincts, but they can help you make more confident stocking decisions. Here are a few ways to use the reports on your top and bottom-performing products:
See exactly which products are driving the most sales, then prioritize shelf space for your best-sellers to ensure they’re easy to find.
Identify products that aren’t selling as quickly and move them to more visible locations, mark them down for clearance, or discontinue them to save money and storage space.
Spot sudden spikes in demand for certain products so you can adjust your displays and stock levels.
Regularly review product performance to help you stock more of what your customers love and phase out what they don’t.
Target slow sellers with special promotions or bundle offers, or use your top-sellers to draw customers in with featured displays or loyalty deals.
Use product-level tracking to prevent perishables from sitting unsold and going to waste.
Demand can swing drastically for any given product — using product performance reports can help you choose whether it’s time to phase out a product or double down and promote it.
If an item consistently shows up as a bottom performer in both units sold and profit contributed, then look at whether previous promotions have helped move it. If it’s not selling but has performed well in promotions, the issue might not be with the item itself, but rather the price point.
If promotional pricing hasn’t helped it or adjusting its price would eat too much into its profitability, it might be time to remove it from your shelves.
An item that’s underperforming might be a top-seller that just needs a little love. If a product is slow-moving but has good profit margins, it may benefit from being somewhere more visible to spark customer interest. You could also try a limited-time promotion or bundling it with other top sellers to boost awareness of that brand.
What separates a good food market from a great one? It’s not just about having more options — it’s understanding what motivates customers to shop at your store.
The reports on your small market POS provide several ways to segment customers, helping you uncover the “why” behind what sells and what doesn’t. These trends can help guide your approach to inventory purchases, promotional strategy, and customer loyalty incentives.
Your loyalty program isn’t just a sales tool — it’s a way to gain insights into the different types of customers that fuel your store’s success.
Use the filters on your customer reports to see what products your top spenders love, what types of items morning shoppers gravitate towards, what departments your frequent shoppers use the most, which promotions were most popular, and more.
Visit frequency
Basket size / average spend
Customer loyalty tier
Promotion redemption activity
New vs. returning customers
In the course of helping customers find their way around the store or checking them out, you probably notice the occasional pattern, like hamburger patties selling more on Friday afternoons, or loyalty members buying discounted drinks in the morning.
But it can be hard to analyze all of your customers’ shopping habits when you’re busy running the store. Using customer-specific data helps you spot many correlations and common behaviors you might otherwise miss.
Here are a few ways store owners can use customer reports to shape their decisions.
Looking at the products your most loyal customers gravitate towards is a great way to build enticing promotions and discounts.
Here are a couple of examples:
Filtering reports by time is a great way to understand what your shoppers want at different times of the day or week. It can also help you spot seasonal trends or trends around local events that you might otherwise have missed.
You can filter reports to answer questions like:
Answering these types of questions is a great starting point for developing new marketing strategies and offering new products that will have the highest impact.
Food markets are constantly running small and big promotions to drive sales, bring in new customers, or sell slow-moving inventory. However, as we said earlier, just looking at overall sales numbers often doesn’t paint the full picture of whether a promotional strategy was a success or not.
Define the goals of each promotion before you run them so you know what kind of data to look at. Here are a few examples:
While it’s great try some new creative promotional ideas, using data to monitor what worked (and what didn’t) will ensure you get the most return on investment (ROI) by helping you define a marketing strategy that works for your unique customers.
Inventory is the single biggest line item of any food market or grocery store’s operating expenses, and getting a handle on what’s moving and what’s sitting idle will help you reduce waste and keep shelves stocked with the products your customers want.
The inventory management tools on a modern grocery POS system keep stock levels updated every time you make a sale or receive an invoice. This data allows you to better manage perishable items and make better stocking decisions so you’re not wasting money on products you can’t sell.
See the rate at which items are moving off your shelves. You might notice bottled water is turning over three times faster than canned soda — that’s an indication it might be time to expand your bottled water space and reduce soda orders.
Quickly identify any items that were scanned at the register but not found in your inventory system. This will help you identify items lacking a price and description, speed up checkout, and may reveal gaps in your receiving or input process.
Use low inventory reports to see what’s running low and automatically build a purchase order for what you need. You can use these reports to set low-stock alerts based on historical sales data and supplier lead times, automatically notifying you when key items need to be reordered.
Spot departments or products with high shrinkage rates to determine the root cause. You might find that you’re overordering certain items, have climate control or refrigeration issues, or, in a worst-case scenario, theft.
Reduce the complexity that inherently comes with tracking a lot of perishable inventory and expiration dates. Use stock aging reports to spot items that are nearing their end of life, so you can plan a clearance sale or other promotion to clear them from your shelves.
Make it easier to manage seasonal stock from your local suppliers. Reviewing your inventory turnover and sales from past years can help identify seasonal trends and ensure you’re prepared.
Looking at your overall revenue and profits alone often isn’t enough to make meaningful changes that will help. In a worst-case scenario, a store owner might see profits are down and make rash decisions about product pricing, staffing, or promotions that ultimately hurt the shopping experience and make things worse.
Here are a few ways you can use reports to identify profit leaders, excess overhead costs, and items with hidden costs. With actionable data points, you can make small but meaningful changes.
Not all products contribute equally to your bottom line. Looking at margin reports ensures you don’t discount slow-selling but high-margin items. Identifying high earners will help you build profitable endcap displays and create appealing promotions that still net a high profit.
It’s not unusual for vendor prices to fluctuate, but long-standing relationships can lead to complacency, meaning you could be missing out on savings due to cost creep. Quarterly vendor pricing reports can help you honestly look at vendor prices over time to help you negotiate better terms or choose a new supplier with confidence.
Labor costs make up 7% to 25% of your total costs, depending on the size of your store. Understanding how staffing affects profitability helps you identify inefficiencies without blanket staffing cuts that could negatively affect the shopping experience. Use labor reports on your POS system to match labor schedules to department performance, or find opportunities to make certain processes more efficient.
Gross profit only accounts for immediate costs of goods, without factoring in the impact of labor, losses, spoilage, and operational expenses. Running a report on your net profits might reveal a department that’s generating high gross profits, but needs adjustments in product variety or labor practices to realize its full potential.
