Estimated reading time: 4 minutes
Many economists are predicting that the United States will experience a recession in 2023. A recession, is defined, as a “significant, widespread, and prolonged downturn in economic activity” And this can have a significant impact on retailers, who tend to see a reduction in sales and, therefore, profits. This decline can lead to business needing to cut costs by laying off workers, reducing spend, or, in the worst-case scenario, shutting down. Forbes predicts that the next recession will occur in the second half of 2023, which means business owners have six to 12 months to prepare.
But what does a recession mean for convenience stores? And what can c-store owners do to try to prevent their stores from being impacted? Here are three ways you can help to recession proof your convenience store:
- Lowering operational costs
Many economists recommend lowering operating expenses before a predicted recession to minimize impact to your business. One of the biggest ways to reduce costs is to cut down on labor spending. This can be done by automating some of your business procedures that previously required human input.
For example, software solutions, such as the free Retail 360 mobile app can help to optimize price book and inventory procedures to eliminate labor costs. When connected to a CStoreOffice subscription, users can easily add new products to their price book or update existing items using Retail360’s Smart Price Book feature.
Because the price book is centralized, it means that every connected POS terminal receives price book updates, saving employee time and owners money on labor.
Retail360 provides m bile inventory counting by utilizing the camera on your mobile device. By conducting inventory counts from the floor (with a handheld scanner or smart phone), you and your employees can save time while tending to the sales floor.
In addition, outsourcing time-consuming tasks can further contribute to operational cost reductions. For example, automating your invoice processing reduces time spent on paperwork by up to 70%.
This means managers can spend more time on the sales floor, where the money is made, and do not need an additional employee to be in the store while they process paperwork. By saving employees time, store owners save money, which makes a large impact on a business, particularly during a recession.
- Minimizing loses
For retailers, minimizing losses can make a significant difference in a business’ profitability. In the retail sector, inventory lost due to theft is the largest source of shrink. The average c-store generated $1.74 million in revenue in 2021. Because the average store has a shrink rate of 1.62%, business owners lose $28,000 of potential profit every year due to shrink. C-store owners can help to recession proof their business by further cushioning their bottom line with an effective loss prevention system.
Loss prevention technology can help reduce shrink, raising your bottom line. For example, Petrosoft’s loss prevention system was designed specifically for convenience stores. It works by automatically flagging transactions that are high-risk for theft, such as no-sales, voids, and returns. Then, it creates a log of video footage taken during these transactions to identify and stop sources of theft.
- Optimizing profits
Retailers can boost profitability further by employing new ways to optimize current revenue. For example, tobacco retailers who implement a Scan Data program can increase profits by thousands of dollars a year.
Scan Data programs work by facilitating a relationship between retailers and tobacco manufacturers. Wherein, retailers can take advantage of promotions from manufacturers and pass savings onto their customers. This means that prices can be more competitive, encouraging customer loyalty and driving more business to the store.
And, while some retailers may already participate in scan data programs, many report their data manually which can add to operational costs. Plus, the cost of human errors: in this case, if the data is entered incorrectly, manufacturers will not issue a rebate – leading to decreased profits. Scan Data programs automatically send the necessary data, eliminating these errors and improving profit margins.
erational costs. Plus, the cost of human errors: in this case, if the data is entered incorrectly, manufacturers will not issue a rebate – leading to decreased profits. Scan Data programs automatically send the necessary data, eliminating these errors and improving profit margins.