European Grocers Reduce Operations Costs Using Facility Management Software
The retail industry worldwide has seen a dramatic shift in sales due to the socio-economic impact of the novel coronavirus. According to Statista, the amount of growth in retail sales had already dropped between 2019 and 2020, even before the outbreak of the virus.1
In Europe, retailers are expected to lose over €3.6 billion due to disruption caused by the health emergency, according to data gathered by LearnBonds.2 As millions of Europeans continue to stay at home to prevent the spread of coronavirus, many of them have decided to order online — taking advantage of cashless payments and digital accounts.
The European food retail sector has experienced increased sales growth amid stockpiling and much reduced eating-out. However, the increase in sales has been offset by the rising costs of food retailers’ primarily due to a surge in supply-demand, which manifests in production and operational bottlenecks and logistical problems of delivering goods to stores.
Maintaining low costs, particularly in facilities operations, is essential due to the current low margins within the retail food industry.
The 6 Most Expensive Work Order Management Categories
From our 20+ years' experience with food retailers, more than half of their maintenance spend is related on these 6 most expensive work orders:
- Refrigeration and Refrigeration Compliance (25-40%)
- Building and Property Maintenance (13-18%)
- Hot Foods and Preparation Equipment (11-20%)
- Electricity/Lighting (8-10%)
- Plumbing (5-8%)
- HVAC (3-8%)
Introducing New Technology
Leading European food retailers have been early adopters of technology, which has enabled new business models and operational advancements and kept the retailers’ costs low. However, many traditional grocers find themselves having to play catch-up.
According to McKinsey, food retailers are experiencing a disruption that can be attributed to changing consumers’ preferences, increasing competition and new technologies.3 These disruptions present considerable challenges.
Over the past decade, food retail has seen an onslaught of new technology. Most grocers have not deployed cutting-edge technologies — including maintenance management solutions, advanced analytics and the Internet of Things (IoT) — as quickly and aggressively as their competitors have.
Adopting technology quickly and successfully will make the difference for future success in Europe’s mature food retail market with a 2% sales growth compared to 8% in Asia. Traditional Grocers are competing with low-price discounters like Lidl and new entrants such as Amazon who are at the vanguard of automation.
Leading retailers are looking for ways to use technology to reduce operational costs and improve their bottom line.
How to Reduce Operational Costs for Food Retailers
Historically, food retailers have run on thin profit margins, with the Food Marketing Institute (FMI) showing that grocery organisations generally produce 1% to 2% profit after taxes.
To stay on track, food retailers must reduce expenses in key asset categories where expenditures are high, and where reactive maintenance and work orders can impact budgets. Grocery stores have significant assets that they must maintain in good working order.
Being able to fix critical assets seamlessly is essential to maintaining excellent customer experience. Furthermore, preventing important equipment such as refrigeration or HVAC systems from failing by using condition-based or predictive remote monitoring will place your organisation at a strategic advantage with an advanced CAFM system that can alert you of problems before they happen.
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.
A CAFM System Purpose-Built for Retail
A CAFM system can help food retailers streamline their maintenance operations while allowing their retail staff to focus on customer experience — helping organisations to fundamentally improve the way they manage their facilities. However, not all CAFM systems are the same.
Many CAFM systems are industry agnostic and can cater to a wide range of organisation’s facilities requirements. Although an agnostic CAFM system may offer key functionality, they often lack the deep reconfigurability required for large retailers.
Accruent’s vx Maintain CAFM solution is purpose-built for large retailers. vx Maintain has been helping retailers for more than 20 years to improve the way they manage their maintenance operations and has helped them save an average of 12-20% in maintenance spending.
Explore a Comprehensive Retail Solution
An innovative maintenance team using a retail CAFM system can help your organisation to not only streamline end-to-end workflows around work orders, but also help eliminate food loss.
Accruent's IoT Remote Monitoring solution, vx Observe, is designed to help your organization implement predictive maintenance to eliminate unplanned equipment downtime, reduce the cost of repair, predict equipment failure by up to 14 days, and eliminate unnecessary spending. Similarly, vx Sustain, Accruent’s Enterprise Refrigerant Management solution, helps your organisation stay in compliance, maintain up to date reports and better manage their refrigerant leaks. With our Field Service Management solution, you can connect field staff with dispatch and critical information to improve service execution, parts tracking, and invoicing.
Grocery stores have significant assets that they must maintain every day to serve customers best, keep food safe and operate at a profit. Our food retail solution suite can help your organisation reduce operational maintenance costs, increase equipment uptime and improve the experience your customers have in-store.
Do not get left behind when it comes to implementing modern technology. Contact us today to learn more about how comprehensive retail suite of technology can help you.