By: TimeForge Labor
Learn how to help your merchants thrive amid the effects of inflation, product shortages, and the lingering pandemic on the grocery and restaurant supply chain.
The past three years have been a rollercoaster for retail businesses. Despite their best efforts amid the pandemic, many businesses didn’t survive the lockdowns and subsequent labor shortages. For those that did, it’s been a slow process of closing all the gaps.
Now, rising inflation, product shortages, and the threat of another economic recession are all undermining the global supply chain and adding to the burdens of an already stressed industry.
And that’s not even considering the evidence that America has more open jobs than it does available workers.
Fortunately, restaurant and retail businesses can both survive and thrive amid these difficulties. They just need the right partners.
Here are 5 things grocers, hoteliers, and restaurant operators can do to help mitigate the ongoing effects of the global supply chain crisis. I’ll break it down with tips for how you can be the best possible partner and leverage these tips to cement your relationships.
1. Help the merchant have the tools to reduce waste
Every item that your merchant throws away is money wasted. By finding ways to reduce waste, they can stretch out the usefulness of the things they buy and save money in the process.
Here’s how to help your client get started:
- Each week, the business should forecast its sales for the following week.
They should be using smart forecasting tools – the “rolling 6-week average” just doesn’t cut it anymore.
Partner tip: Yes, TimeForge can forecast sales reallllllllly well – so we can be your partner on this.
- Then, they need to go back and look at how well they did.
A simple weekly accuracy metric, like Weekly Amount Forecasted vs. Weekly Amount Sold is a good start.
Partner tip: TimeForge can provide forecast accuracy metrics around hourly sales by department – this helps narrow down inaccuracy in volume & demand throughout the day/week, instead of just looking at total variance.
- The merchant should ask themself whether they overestimated their need for certain products or underestimated their need for others.
Partner tip: Inventory management platforms can be a huge help on specific item movement estimations, and having a good perpetual inventory platform can be a game-changer here.
- If the merchant overestimated or underestimated their necessary volume, they should figure out why and adjust their next forecast accordingly.
Partner tip: Looking at local events, weather, labor coverage, CSAT, and buyer information (like Out of Stocks mid-week) can be an important launch point. Integrating a promotions tool and loyalty platforms into the forecasting process can reduce the need for this step.
- The merchant should swap out any products that consistently result in waste – or get creative and find ways to use the excess. For example, a restaurant could try using veggies in hearty soups or leftover bread for salad croutons.
Partner tip: A strong KDS or Ops Execution platform can help with transitions.
And don’t forget that time is money, which means wasted time is also wasted money. Labor controls are essential for any waste reduction program.
Your merchant should use their sales forecasts to build their labor schedules so that they have the right people in the right places at the right times. Most businesses have realized by now that proactive labor controls and agile, real-time workforce management platforms like TimeForge are not only critical to success and talent competition, but pay for themselves quickly.
(And if you serve merchants in a tip credit state, don’t forget about the latest 80/20 rules. Nothing is a bigger waste of time and money than getting hit with avoidable fines.)
2. Help the merchant have the tools to use and promote sustainable products
Using locally-sourced and sustainable products can help your merchants in two ways:
- First, locally-sourced goods can protect their supply chain from the current instability of the global market, if the merchant is still being impacted.
- Second, sustainable products can help attract socially-conscious guests to their location.
The key is to make sure the merchant takes time to advertise. If consumers don’t know that the merchant uses local ingredients, they can’t make an informed choice.
Also, keep in mind that reusable items can dramatically reduce a merchant’s non-food product costs.
For example, you could encourage your merchants to look at programs like “customers bring their own drink containers” (or buy reusable containers from the merchant). This could help cut down on the amount of paper or plastic cups the merchant needs to buy.
3. Help the merchant have the tools to reevaluate their offering with fresh eyes
Now that the worst of the pandemic seems to be over, it’s a good time for businesses to reevaluate their offering. (Partner tip: You too, vendor!)
In particular, think about how your merchant can
- use ingredients or inventory across different menu items or departments, and
- make use of products that are easier to prepare or less expensive to source.
For example, consider helping your merchant think about swapping out fruits and veggies that are out-of-season for those that are currently in season. They may need a better menu management system, or a better back office to help with such an initiative. Again, they should buy local if they can, and don’t forget to let your merchants know that they should market to their guests that they are supporting local businesses. They may need a good marketing partner, signage, or outsourced services to help.
You might also consider recommending that your merchant use an inventory and recipe management system if they’re a restaurant. For restaurants, a good system can help them identify weak links in their restaurant’s menu so that they can make the most of the current supply chain.
4. Help your merchant diversify their supplier base
As the saying goes, you should never put all your eggs in one basket.
This advice is as relevant to your customer’s supply chain as it is to any aspect of your business.
Having multiple suppliers for each key ingredient or product ensures that they can continue to source the items they need even if one vendor is having difficulties. Again – if they don’t have a great inventory management system and clean operations execution systems, they should. There are great partner options among RSPA Members.
5. Strengthen your relationship with other vendors so that you can be the Go-To Guy for your merchants
Last but not least, it’s important to foster strong relationships with your partners so that you know for certain what is or isn’t a good fit for your merchants. Not only that, but to see them as long-term partners rather than simply as solution providers who you hope to get revenue from. Truly understanding your merchants’ needs and the solutions available in the space are key to retaining those deep relationships that are rewarding in the long term.
Strong vendor relationships can help your merchant stay afloat in stormy weather. They’ll assist your customer in working through difficult problems and will open up new networks and additional resources so that they’ll have alternatives if and when their supply chain is disrupted.
Merchants know that a truly valuable partner to them will always suggest the best solutions for their problem, even if it’s not your own product or service.
This is something we do here at TimeForge.
If our product isn’t the right one, for example, we’ll happily refer you to other trustworthy vendors that will fit the bill and take good care of their business.
Be there for them: Your merchants don’t have to safeguard their supply chain alone
The global supply chain may be uncertain, but by strengthening your customers’ fundamentals – including your vendor relationships and their vendor relationships, as well as their menu, labor, and products – you can help your client create a more efficient (read: profitable) business. One that will not only survive but thrive amid the difficulties and leave you better prepared to help their business meet future challenges, too.
The good news is, you don’t have to go it alone.
Build trust with your partners, help your clients build trust with you, help them build trust with your vendor ecosystem, and you’ll position the businesses that you serve to be able to weather even the worst storms.
Final note from Audrey Hogan, COO of TimeForge: “In all of my years serving retail, I’ve found the most rewarding, lasting, and loyal client relationships are those where the merchants consider me their ‘Go-To Guy’.
When the merchant is having a problem or facing a new challenge, whether it’s directly related to my services and products or not, they call me. I develop a relationship where they are safe to have an attitude of, “I’ve got to figure this out. Other businesses face this challenge. Who knows how other businesses have handled this? I’ve got a guy for that! Let me call Audrey!”
I’ve referred customers to partners, taught my clients about Google Plus Notation, troubleshooted how to move a filing cabinet… the list is endless. The key to maintaining this ‘I am your go-to guy’ relationship is staying current and knowledgeable about what challenges the industry is facing, and knowing just enough about the solution ecosystem to point them in the right direction.”