3 Overlooked Reasons Your Labor Costs Keep Increasing 

In a time where industry standards and strategies are changing almost weekly, labor costs continue to rise, bringing headaches to the minds of grocery industry leaders and management teams alike. Many grocers tend to think too big picture when it comes to finding solutions for increasing labor costs. In reality, some of the easiest ways to decrease labor costs offer tangible, efficient, and adaptable solutions that grocers can implement almost immediately. 

One area of wasted labor costs comes from scheduling issues that chip away at both management and your associate team’s time. When associates need to get a shift covered, they inevitably discuss having that shift covered with their co-workers while at work, on the clock, on the job. If they’re not having that conversation right then and there, their quality of work is lowered because they’re distracted by the fact that they need to get their shift covered. Both of these factors distract multiple team members from working effectively at the same time.

Scheduling change requests can also bog down management. By implementing a time scheduling solution that includes functionality for employees to manage and edit their schedule remotely on their mobile device, including the ability to view the schedules of other team members who may be able to cover a shift when needed, both the associate and upper management can find a solution to their wasted time and issues with increased labor costs. 

Another reason your labor costs keep increasing is because of time spent helping customers finding products. A 2008 study found that stores spend about $785 per week helping customers find products or checking to see if inventory is available in the backroom for a product that the customer wants but is not on the shelf. Consider implementing a bring-your-own-device policy where associates are able to access aisle location information and check back stock inventory quickly from their device. This solution saves not only the associates time, but also the customers time so that they can get back to their regular shopping routine without waiting around for an associate to come back with an answer. You could even go the extra mile and implement a shelf monitoring camera system like Trax, which keeps tabs on actual shelf inventory and saves labor time. 

The final factor that contributes to increased labor costs is the amount of time that grocery store employees spend stocking and checking the shelves. A large part of this challenge comes from grocers avoiding SKU rationalization and how much it can benefit not only their employees, but their customers as well. 

By having fewer SKUs on the shelves, your time spent managing ordering, stocking, and facilitating price changes will drive labor savings. Consider the theories mentioned in the book The Paradox of Choice: Why More is Less by American psychologist Barry Schwartz. “There are now several books and magazines devoted to what is called the “voluntary simplicity” movement. Its core idea is that we have too many choices, too many decisions, too little time to do what is really important. … Taking care of our own “wants” and focusing on what we “want” to do does not strike me as a solution to the problem of too much choice.” While SKU rationalization might sound like taking your favorite brand or product off of the shelves, it’s really an easier way for customers to find the exact products they want without fumbling through dozens of grocery shelves of the same products. The same sentiment applies to your associates; instead of spending 5 minutes looking for the right chocolate chip pancake mix box, they are able to find it in just a few seconds since the number of similar or copycat products is limited. 

While implementing SKU rationalization tactics will surely be beneficial, relying on traditional rotating and stocking methods even with limited SKUs influence increasing labor costs. By using traditional date checking and stock rotation methods, employees waste valuable time that would be better used to relieve long lines and frustration at the checkout to enhance the customer experience. 

Split out date checking from stocking in mid-shelf life departments like dairy and packaged meat. By integrating date checking with stocking entirely, you either push for fasting stocking efficiently leaving rotation and date checking to the wayside, or your stocking labor costs become inflated with an inability to distinguish how much is being spent stocking versus checking dates. 

An efficient way to avoid increasing labor costs is to outsource your expiration date management. From 2015 to 2018, labor productivity in the grocery industry rose an average of 3.2%, largely driven by technological advances. Solutions like Date Check Pro offer a no-cost model where stores pay for the service only from expired product savings achieved while still being able to immediately eliminate labor budgeted for date checking. Think of the time, money, and reputation you’ll save from your employees knowing exactly which products are expired or close dated and need to be checked instead of thumbing through products and neglecting the needs of their customers. 

At the forefront of every grocer’s mind is the quality of experience that their customers receive in-store. Grocers want to offer their customers the freshest and best quality foods at a price point that is reasonable for both the store and shopper alike, but in the COVID-19 era, many shoppers are citing the in-store quality experience as a bigger determining factor than price when it comes to which store to shop at. By overlooking these reasons that your labor costs keep increasing, you’re putting your customers quality experiences on the backburner. These decisions could lead to your store developing a bad reputation, or worst, your loyal shoppers choosing to take their business elsewhere.