Edmonton,AB- As reported this week by the Wall Street Journal and CTV, the price of food is going up and that could mean trouble for not only the consumer, but the small grocery stores who already struggle against the larger chains. Business expert Greg Kopchuk with ActionCOACH Canada has some solutions for the tough times ahead.
“When grocery costs rise, small business owners panic because they are reluctant to raise prices. They usually know their regular customers better than the average large grocery chain, and because of that they don’t want to pass the cost onto their customer. As a result it eats away at their profits. You wouldn’t believe the amount of local grocery stores that haven’t raised their prices in 5 years or more because of that reason- and that’s why 80% of all businesses close their doors every 10 years,” says Kopchuk, an expert in small business solutions.
Greg has these recommendations for small business owners:
1. Increase prices on some products and do several small increases over time. Also always watch the overheads and look for ways to reduce it. Work on getting customers coming back more often and get them to spend a little more each time. Also work on converting more people who come into the store.
2. Watch your margins and act accordingly. For instance, at a sample 40% margin a 10% increase in your price could sustain a 20% reduction in your sales volume.
3. Do NOT increase prices on the staples (milk, butter, eggs) unless you absolutely have to. Even Safeway had to reduce their prices in 2010 in order to compete with Loblaws.
4) Make sure your store is spotless. (And by “spotless” I mean “so clean your mother would eat off the floor.”)
5) At the register, make sure customers are within easy reach to profitable add-ons—magazines, candy, chips, pop, knick-knacks, you name it. The higher the profit margin, the closer it should be to your cash register.
6) Keep all the low margin stuff at the very back of your store.
7) Finally, keep an eye on quality, customer care and presentation. If you sell the same quality of apples as the neighborhood Megalomart, why would people make a point of coming to you? If customers have to wait in line just as long, why will they keep coming to you? Finally, like I said—spotless. Your store should be famous for being clean.
Greg Kopchuk heads up ActionCOACH Canada, the #1 business coaching firm in Canada. They work with established and emerging small and medium businesses.They are the winners of the CFA Bronze Award of excellence for non-traditional franchises.
For information on Greg Kopchuk and ActionCOACH Canada visit: www.actioncoachcanada.ca
To book an interview contact:
Rachel Sentes, publicist