Helping Grocers Stay Competitive: Study

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Helping Grocers Stay Competitive: Study

04/23/2008
Tech these days is an indispensable weapon in the smart grocer's arsenal, according to "Food Retailing Technology Benchmarks 2008," a new study from the Food Marketing Institute (FMI). The trade group's latest research effort concluded that food retailers are increasingly leveraging technology to remain competitive, meet consumer demand, and boost operational efficiency to improve sales and profits

"Retailers are leveraging technology to streamline operations and cut costs, enhance service, and meet market demands with increasing precision," said Pat Walsh, FMI v.p. of industry and trade development. "It's become an integral part of the supplier-retailer relationship." 

FMI said the study, based on a survey of 45 grocers operating 5,188 stores across the United States, found close to 50 percent of operators have a frequent shopper program, with 90 percent of their customers participating in it.

Among supermarkets that have such programs, 84.2 percent claimed a greater number of weekly store visits from program participants, while 76.5 percent cited higher gross margins for shoppers holding frequent shopper cards.

Over 85 percent of companies use electronic data interchange (EDI), up from 67 percent in 2005. Grocers use EDI most frequently for purchase order remittance advice, invoices, and advanced shipping notices.

Fifty percent of retailers report using scan-based trading (SBT), when a supplier maintains its inventory within a retailer's warehouse or store until the product is scanned at the checkout. This usage rate is up from 26 percent in 2005. In addition, a quarter of retailers are using data synchronization.

Most grocers, 93 percent, use the Internet at the store level for applications such as labor scheduling, time and attendance, and loss prevention. Seven in 10 retailers said they use an Intranet as an employee communications tool, for posting human resource policies and job vacancies, and 48.7 percent use for employee training.  

FMI said the study is based on questionnaires sent in December 2007 and January 2008, and reflects data from 2007.