6 Simple Ways to Make Your Grocery Store More Profitable

If you own an independent grocery store, you understand that turning a profit is no easy feat. In fact, groceries stores tend to have some of the lowest profit margins (1-3% on average) compared to other types of businesses, with some specialty grocery stores averaging slightly higher. Owning a small business is rewarding for many reasons, but ultimately you started your grocery business to make money. So how can you make your grocery store more profitable?

With such slim profit margins, grocery stores make their money based on volume. Shoppers tend to take advantage of a trip to the grocery store as an opportunity to stock up on everything they will need for the next week or longer. The Covid-19 pandemic has only increased this tendency, as consumers are looking to minimize their store visits and buy everything they need at once. While shoppers are in your store, there are some best practices you can follow that will encourage them to buy more.

Here are 6 ways you can increase sales and improve the profitability of your grocery store:

1. Make a visit to your store a pleasurable experience

Help make a trip through your store enticing for shoppers. Place your best deals at the store entrance to excite customers as they start their shopping visit and put them in the mood to buy. Pay attention to the visual presentation of your products. Make sure stores shelves are full and neatly stocked, display tables artfully arranged, and store aisles clear and easy to navigate. Play pleasant background music for customers to listen to while they peruse (in fact, fast-tempo background music has been scientifically proven to increase supermarket retail sales).

2. Pair displayed products strategically

Display grocery items in a way that encourages shoppers to buy more. Pair lower-cost items with higher-cost products so customers are more likely to buy them all at once (for example, boxes of pasta and jars of tomato sauce next to more expensive bottles of red wine that would make a nice accompaniment for that night’s dinner). Product endcaps are a great place to feature these curated displays.

3. Make it easy for shoppers to buy more

Your customers may come into your store with a short shopping list, so do what you can to make it easier for them to buy more than they planned to. Offer larger shopping carts that they are more likely to fill. Distribute shopping baskets throughout the store for those people whose arms are getting full and realize midway through their shopping trip that they do need a basket after all. Once they’re holding a basket, they’ll be more inclined to keep shopping until they fill it.

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4. Inspire customers to purchase things they don’t normally buy

Encourage shoppers to buy items that they may not have originally planned to by offering coupons for more specialty products at the store entrance. Display recipes throughout the store for inspiration; now instead of that one vegetable, your customer will buy every ingredient in the recipe that includes it. Change the layout of your store once in a while so shoppers must seek out what they are looking for, and likely discover new sections of your store and new products they might not have noticed before.

5. Reduce spoilage of your perishable products

Some of the most profitable items in grocery stores include perishable items such as cheese, meat, and fresh produce, but your store’s profits can be severely impacted by spoilage. While American consumer habits have changed and there’s increased demand for fresh fruits and vegetables, fresh produce has a much shorter shelf life than frozen and canned foods, and grocery store owners are forced to throw much of it away as it becomes overripe or spoiled. In fact, according to the U.S. Department of Agriculture, 30-40% of the U.S. food supply goes to waste, the majority of it at the retail and consumer level. This is why you should consider investing in a produce inventory management software solution that helps better manage your food inventory to reduce shrink caused by spoilage.

6. Ensure shoppers feel safe and make them loyal customers

These days, customers may be nervous about being inside a store where there are a lot of other people. You can win customer loyalty by going the extra mile to help shoppers feel safer in your store. Offer special “senior shopping” hours early in the day for those who are 65 years old or over or who have pre-existing medical conditions. Ensure that you and your employees follow state and local health guidelines regarding the use of face masks and the number of shoppers allowed inside at the same time. Distribute bottles of hand sanitizer throughout the store. If customers notice that you are doing everything possible to keep them safe, your business will become their go-to grocery store.

Make your grocery store more profitable by encouraging repeat customers

The good news when it comes to running a grocery store is that nearly everyone needs to shop in one regularly, which means there’s an enormous potential customer base out there for your business. Following these tips can help ensure regular customers keep coming back, and new customers turn into regulars.

FAQs about making grocery stores more profitable

Below we have summarized the most important questions and answers on the subject.

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