Higher volume offers return on effort

08/10/2012 9:00:47 AM
Armand Lobato

Armand Lobato, The Produce Aisle The single most important goal of a produce manager is to maximize sales. I sometimes get asked why.

There’s a method behind the “find ways to squeeze out every sale you can” madness theme. Every extra produce item placed in a shopping cart means sales volume. And volume, as any store manager worth his pocket protector will attest, cures many ills.

“But why push so hard for sales that may not even materialize?” a produce manager once asked. “I’m in a medium-volume store in a blue-collar neighborhood. It seems stores like mine have only so much sales potential.”

The lament continued: “Why push for higher volume? I get paid the same as the produce manager down the street, who has twice the sales and (presumably) twice the headaches.”

The easiest course of action for our friend is to continue going through the motions of doing the minimum and merchandising at a comfortable, safe level.

However, many rewards await those who press for more sales. Those who build the secondary displays, try new items, create massive (or at least abundant-looking) displays or push for demos on busy Saturdays.

First, as a department builds sales, the results justify a higher labor budget. More labor dollars translate into greater schedule flexibility to spend on merchandising projects or even special projects (like participating in display contests).

Also, with a higher labor range employees are generally happier, especially part-timers who would otherwise have to go to extraordinary lengths to pick up more hours. Added shifts mean more flexibility to meet employee desires, such as consistency in being able to provide requested shifts or days off.

Higher sales also make it easier to manage inventory. Knowing a department is capable of moving volumes of fresh produce gives a manager confidence to order aggressively and take risks, such as merchandising berries (which normally require refrigeration) on a nonrefrigerated table during busy periods, knowing the display will turn quickly with minimal shrink.

And, if you happen to get long on inventory, when managing a busy store the problem is usually remedied simply by backing off a day or so (or pushing the excess inventory on an expanded display) and the situation typically corrects itself rather nicely.

As opposed to a slower store that has to resort to deep discounts, losing potential sales and associated gross profits.

It may take months or longer to achieve “maximum sales status” — if there even is such a point. But whatever level you can sustain, it’s worth the extra effort.

Armand Lobato works for the Idaho Potato Commission. His 30 years of experience in the produce business span a range of foodservice and retail positions.

armandlobato@comcast.net

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Comments (2) Leave a comment 

why would you sell tomatoes at $.90/# or more when purchased at $ .30/# delivered
when you could profit from them at $.40/# and get more movement from them?

The only retailers in the USA that understand this are the latino retailers and move
loads per week, this attracts more consumers to get other items at premium prices.
I'm referring to low and high end latino markets, whee a non-latino will never go
shopping, but you have a greater consumer based also in the non latino population
that would tremendously benefit from a retailer that would go to this end first before it
also becomes a trend.

Both retailers are getting the same quality tomato, from the same place at the same
prices, difference is, the latino retailer is maximizing sales ad making a higher sales
profit than the other.

Excellent point. If you notice I stress higher volume to maximize sales, not raise prices. If anything higher prices usually push volume down and make a retailer less-competitive. The trick is to take advantage of all sales opportunities so the extra volume will drive overall sales up.

That's the whole premise of grocery stores: to sell items (competively) in gross quantities - hence the 'groc' in grocers. Latino markets are indeed one example of aggressive pricing (meaning selling on as low a margin as possible) in order to maximize sales. "A fast nickel is better than a slow dime."