Run the department like it’s your business

09/13/2013 02:30:00 PM
Armand Lobato

My first store as a produce manager was a bustling, inner-city store, and it was a great start.

My produce director when I was promoted to produce manager had some advice for me: “Manage the produce department like it’s your own business.”

Managing a department is indeed like running an operation that is part of something bigger. The history of the modern grocer goes back many decades, when the idea of assembling what used to be separate businesses (the butcher shop, the bakery and, of course, the fruit stand) under one roof became a “super” market setting.

While a supermarket format tolerates (for competitive reasons) some departments to operate on razor-thin margins, it’s up to “the perishables” — namely the produce department — to provide heavier profits for the store to reach its goals. That means contributing enough money to not only satisfy the stockholders but keep the lights on too.

That’s why it’s important for a produce manager to operate the department with a keen eye on the business. He’s carrying the bulk of the profit load.

A produce manager should be aware of financials of the day-to-day operation. Mostly, this means knowing the cost of goods. If there’s a spike in avocado prices or an opportunity to push a high-profit berry allocation, he needs to recognize this. Usually this means adjusting the space allocated for the item, expanding facings for greater exposure or reducing space to control shrink. Financial obligations leave a trail that needs to be monitored from receiving to the checkout stands. Reviewing invoices for accurate charged costs and quantities are a daily must, for one example.

Maintaining a labor plan, while it doesn’t affect the profit margin, certainly eats into the contribution to overhead. A good produce manager understands how to schedule labor to meet the needs of the department — being aggressive at busy periods while cutting back during slow periods.

Operating at slightly below goals helps bank or defer labor dollars for the occasional special event.

Any good produce business operator maintains a workable inventory. Order too much and profits drain away in fire-sale situations. Order too little and you risk lost sales. Inventory control is a fine balance that must be scrutinized daily to minimize risk, while anticipating for heavy volume periods.

All this dry, business speak almost drowns out what produce managers do best and justifies repeating:
Merchandising. In any given week, it isn’t that you won’t have problems (everyone does) but rather how you react to the over/under situations that make the difference. A daily evaluation will compel a produce manager to expand displays to spur sales, cut back on others or send someone to the warehouse to pick up needed inventory.


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