Historically, grocery stores have run on thin profit margins, with the Food Marketing Institute (FMI) showing that grocery organizations generally produce 1% to 2% profit after taxes.
As a result, finding cost savings is extremely important, especially in complex areas such as compliance, work order management, and general maintenance planning where budgets can balloon quickly.
To stay on track for the year, it is important for grocers to reduce expenses in key asset categories where spend is high and reactive maintenance and work orders can impact budgets.
The 6 Most Expensive Work Order Management Categories:
- Refrigeration and Refrigeration Compliance.
- Building and Property Maintenance.
- Hot Foods and Preparation Equipment.
Refrigeration and Refrigeration Compliance.
The top expense area for grocery organizations are work orders related to refrigeration and refrigeration compliance. A recent trend indicates that grocery stores are keeping more perishable food items in their inventory, which means more coolers and display cases to manage across the enterprise. With Environmental Protection Agency (EPA) guidelines on refrigerant and ozone depleting substances changing at the start of 2019 and continuing into 2020, cost and management of these substances will only expand. Refrigeration and its compliance are one of the most expensive categories for reactive and emergency work order fees, due to the urgency of refrigeration case downtime.
Accruent’s grocery customers have spent anywhere from 25% to 40% of all work order spend on refrigeration-related work orders.
Building and Property Maintenance.
Another expensive area for grocery companies is building and property maintenance. All stores must maintain brand guidelines, customer and employee safety, and an orderly, modern shopping appearance for customers. No surprise then that this can be an expensive endeavor, with everything from flooring, windows, roofing, and parking lots to maintain.
Here, our customers spend between 13% to 18% of their work order expenditures in this category.
Hot Foods and Preparation Equipment.
The third primary area of expense are hot foods and preparation equipment. In contrast to the traditional take-out restaurant, many grocers have expanded offerings in “to-go food” that customers can either pick up and eat quickly or take home to their families. These expanded offerings can make hot food and food preparation equipment critical to operating areas such as delis, bakeries, coffee shops, and rotisserie chicken stations.
Depending on the floor plan and offering of the store, grocery organizations can spend anywhere from 11% to 20% of their work order expenditure in this category.
HVAC, Lighting and Plumbing.
Other expenditures for grocery stores are maintenance categories such as HVAC, lighting and plumbing. These maintenance categories are another instance where reactive work orders can become quite costly and have a tremendous impact on a business. Grocery consumers cannot shop in a building that does not have proper HVAC, lighting and plumbing.
In fact, Accruent customers spend between 16% to 26% of their overall work order spend in these categories.
Grocery stores have significant assets that they must maintain every day to best serve customers, keep food safe, and operate at a profit.
Over half of a typical grocer’s maintenance spend is on these 6 most expensive work orders. It takes a disciplined maintenance staff and an exceptional work order management system to track these work orders to ensure that you are not overspending on critical assets. Stop overspending on work orders, learn more about Accruent's facilities operations software!