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How Food Retailers Can Combat the Rising Cost of Goods and Commodities

By Published On: October 7, 2022

The recent inflation happening around the globe is adversely affecting many different industries, especially food retail. From the supply chain to food production and processing, to retail store operations, every sector is feeling the impact and bearing the brunt of inflation.

The rising cost of goods and commodities continues to be a global challenge and greatly affects how consumers behave when it comes to their buying decisions. Not just that, but inflation affects retailers regarding how they strategically operate in the hopes of boosting their numbers without sacrificing the other key elements of their business.

These days are complex inflationary times and the continuous rise of prices is not expected to decline anytime during the remainder of this year. Here are some ways food retailers can combat inflation to help keep business afloat:

Strategic Pricing

Due to the current food retail landscape, the usual ways to combat inflation, like increasing food product prices and matching it with competitors, won’t cut it anymore. Today, strategic pricing is key. This involves a holistic approach to controlling and managing prices across the entire food retail operation. From identifying key product drivers and leveraging them for pricing, offering new products in-store with competitive prices, and employing an effective promotional pricing strategy, adopting strategic steps towards pricing will help retailers effectively fight the battle against inflation.

Effective Use of Technology

Technological innovations have alleviated many of the struggles retailers have faced in difficult times, including inflation. One prominent way retailers can use technology at this time is by offering customers a seamless Omni-shopping experience, making online and in-store shopping available for customers wherever, and whenever. With this approach, customers can have easy and convenient access to relevant information about products that they are planning to purchase, thereby increasing the retailer’s chance to gain a more sizeable share of their customers’ dollar spending. Another way technology can help retailers during these inflationary times is by using relevant and factual data. Customer data of this nature can give retailers a realistic view of both how and what their typical customers prefer to buy. With these insights, retailers can proactively manage their inventory and reduce overstocking or stocking the wrong products.

Offering Alternatives

Because of rocketing prices, many customers will look for alternatives to their favorite products. Food retailers can give their customers these options by offering alternative brands, such as private labels, which are competitively priced. This way, customers can save on their grocery spending while retailers gain significant market share.

Knowing What Food Items to Sell

Identifying the correct product mix to showcase in-store is crucial for business profitability. Food retailers certainly don’t want to showcase food products front and center in their stores only to find out that they missed their target audience, right? Identifying key products that can weather reduced prices, and defining where price increases can be made without adversely affecting the financial bottom line, can help keep business revenue and margin goals working as planned.

As an industry, we have continuously faced different challenges that affected and often changed how we do business. Having dealt with the pandemic and various natural disasters, this current inflation threat isn’t any different. Food retailers who will adopt these measures will not just attract and retain loyal customers but will also improve customer satisfaction, and ultimately, emerge successful from these inflationary periods.