How Convenience Store Operators can Successfully Navigate High Inflation
In 2020, we were all thinking that the disruption caused by the pandemic was a once in a lifetime event. Since then, we have dealt with supply chain issues, a massive labor shortage, wildly volatile fuel prices and the highest inflation in over 40 years.
The average price of unleaded fuel in the United States reached $4.32 per gallon this week, an increase of 47% over the same time a year ago. The inflation rate in April was reported to be 8.3% according to the Bureau of Labor Statistics. Unfortunately, we’re all aware that the cost of many products like eggs, milk and ground beef have increased by significantly more.
Over the last two years, Taiga has partnered with our clients to identify actionable and strategic ways for them to succeed despite these disruptions. Conquering the latest challenges due to price inflation is no different.
In this environment, having access to your data in real-time can mean the difference between running at a profit or a loss. Here are four examples of questions that our real-time data can help answer and how Taiga is helping c-store operators navigate these challenges successfully:
- Identify New Trends In Your Customers’ Behavior
- If previous periods of stress are an indicator, we can assume that alcohol consumption will increase. Will convenience stores see another surge in alcohol sales as customers cut spending at bars and restaurants? Will they purchase their beverages at convenience stores to save money by drinking at home?
- Some customers are beginning to shift from high end products to price performers. Which categories, sub-categories and brands are experiencing the biggest shift? How should your product mix and space allocation change to capitalize on this trend?
- As customers become more price sensitive, how is that affecting the take rate on your promotions? How should you adapt your promotion strategy to remain profitable?
- Identify Where Your Margins are Being Squeezed
- How quickly can you detect when individual SKUs become unprofitable because the cost of the product has increased but your retail price hasn’t changed?
- Can you automatically alert staff members to the need to update prices when this happens?
- Analyze Customer Traffic
- Is your fuel to in-store conversion rate increasing, decreasing, or staying the same in this inflationary environment?
- How are your peak store hours changing as consumers shop differently? How should your staffing be adjusted to maximize customer experience and profitability?
- Forecast Future Demand
- Can you accurately predict consumer demand and incorporate external factors like the weather forecast to optimize your business?
- Predictive forecasts can have a massive impact on the profitability of your food service. Do you know exactly how many items to prepare each morning? What other changes might you make if you had an accurate sales forecast?
It is a challenge to operate in this environment where supply chains are disrupted, labor costs are increasing, fuel prices are unstable, and inflation is running out of control. The only way to regain control of your future is to change your business strategy from being reactive to being data-driven and proactive. Once you start to analyze your data, you will quickly realize that you had been unaware of the best opportunities to adapt and improve the performance of your business.
Our goal at Taiga is to partner with our clients by providing access to actionable data straight from their stores in real-time. This enables them to become more agile and respond within minutes rather than wasting valuable staff time trying to pull complicated and incomplete reports out of their back office. As you can see in the examples above, the amount of information and analysis that is available to our clients in real-time is game changing and those four examples are just the tip of the iceberg.
We would love to show you more of our Front Office System capabilities. Please contact us to schedule a demonstration at your convenience.