8 Ways To Increase Your Grocery Store’s Revenue

Slow foot traffic, stagnant revenue, and impossibly thin profit margins. 

Unfortunately, independent grocers are all too familiar with these problems. With tough competition from big-box supermarkets and constant economic challenges, addressing them can feel impossible. 

But there’s good news: This article outlines eight of the most effective ways to increase your grocery store’s revenue. We’ll cover expert tips on inventory management, marketing, and more to help you drive sales and boost your bottom line. 

Let’s dive in! 

How To Improve Inventory Management

Successful grocers have one thing in common: They’re inventory management pros. 

Stocking the right products in the right amounts is critical for your grocery store’s financial health. If you order too many perishable items, you’ll suffer losses due to spoilage. If you don’t order enough, you’ll lose sales and customers to stockouts. 

Let’s look at three essential steps for better grocery store inventory management. 

1. Prevent Stockouts

Your customers rely on you to stock their fridges and pantries with everyday staples. When you run out of their favorite breakfast cereal or cut of steak, they have to go somewhere else — and they might not come back. 

To protect your revenue and reputation, invest in a point of sale (POS) system with these must-have inventory management features: 

• Real-time inventory tracking: Get an accurate overview of stock levels across your departments, making it easy to spot when you’re running low on a bestseller. 

• Automated purchase orders: Create purchase orders within your POS system to save time and eliminate manual steps.

• Cloud-based access: Check your inventory reports from anywhere, at any time. 

Having accurate inventory data right at your fingertips reduces the burden of manually tracking stock levels and makes it easier to take action before stockouts strike. 

2. Minimize Spoilage

Every time you throw away a wilted head of cabbage or an out-of-date milk carton, your grocery store revenue suffers. 

Let’s look at three ways to reduce spoilage and safeguard your profit margins: 

• Track batch and expiry dates: Identify short-dated products, and use strategic promotions to increase turnover before they expire. 
• Adopt a first in, first out (FIFO) approach: Ensure proper turnover by displaying your oldest products at the front of your shelves and adding new stock to the back. 
• Make data-driven ordering decisions: Analyze historical demand and understand your customers’ shopping habits to order the right products in the right amounts. 

Remember: The best way to reduce spoilage is to prevent it in the first place, so rely on your POS system’s sales reports to help you strike the right balance between overstocking and understocking. 

3. Optimize Your Product Mix

We’ve covered how to prevent stockout and spoilage-related losses — but let’s take your inventory management and grocery store revenue to the next level. 

Understanding your customers can help you tailor your product selection to meet their unique needs. Use your POS system’s sales data to identify their product preferences, shopping habits, and seasonal behaviors. 

Let’s say your sales reports show frequent stockouts of nondairy milk alternatives and high spoilage among your traditional dairy products. In this case, you should stock higher quantities of different nondairy options to meet your customers’ changing needs. 

Free resource: The Ultimate Guide to the Top Products Sold in Grocery Stores

How To Drive Foot Traffic

Slow foot traffic means low grocery store revenue — but there are several reasons why small grocery stores struggle to generate high sales volume. 

Whether you’re hoping to attract more shoppers, increase your checkout speed, or compete with the big names, we hope these tips will help you get customers in the door and through the checkout line. 

4. Become a Grocery Store Marketing Pro

First, let’s talk marketing. You need strategies to attract new customers and keep them coming back. 

Here are some of the best ways to drive higher foot traffic and sales in your grocery store: 

• Build your online presence: Use your Google Business Profile and social media presence to connect with members of your community and tell them more about your grocery store. 
• Launch a customer loyalty program: Reward customers every time they shop with you by letting them earn special perks and discounts on every purchase. 
• Start an email or SMS newsletter: Give customers new reasons to stop by your store by sending marketing messages right to their inbox. 

These should help you drive sales in the short and long term. 

5. Adopt Self-Checkout

Want to make more sales in less time? Consider adopting self-checkout. 

You might think of self-checkout as a high-tech option for huge supermarkets, but it’s one of our favorite tools for small grocery stores, too. That’s because you can save money on labor costs, shorten checkout lines, and create a more convenient shopping experience for your customers. 

Self-checkout doesn’t have to be expensive. For example, IT Retail’s flexible grocery store hardware can be used as a traditional cashier-led lane or a self-checkout kiosk. 

Related Read: 6 Pros and Cons of Self-Checkout in Grocery Stores 

6. Experiment With E-Commerce

Over half of consumers place at least one online grocery order per month. If you haven’t embraced e-commerce, you’re losing these sales to online grocery giants like Walmart and Amazon Fresh. 

Taking your grocery store online might seem intimidating, but the right approach can help you start making online sales stress-free. Here’s a simple roadmap to follow: 

• Invest in a grocery e-commerce platform: We recommend app-based options like Instacart or a fully integrated POS and e-commerce solution. 
• Start with pickup: It might be tempting to dive straight into the world of grocery delivery, but pickup is a more beginner-friendly option. It’s affordable, straightforward, and easier to manage. 
• Build your online grocery store: Write product descriptions, add high-quality photos, and make navigating your website as easy as exploring your in-store aisles. 
• Understand online grocery pricing: Set an order minimum and charge smart markups on your most popular products to ensure each online sale is profitable. 

Getting into the grocery e-commerce game takes careful strategizing, but the hard work turns into more customers and more sales. 

How To Increase Basket Sizes

Finally, let’s talk about one of the most important key performance indicators (KPIs) for high grocery store revenue: average basket size. 

This metric represents how many items and how much customers spend during each visit to your grocery store. Increasing your average basket size is an easy and effective way to boost your overall revenue. 

Let’s look at three of our top tips to encourage larger purchases. 

7. Refresh Your Grocery Store’s Layout

Have you ever wondered why all grocery stores have similar layouts? Staples like milk are almost always at the back of the store, promotional products are usually displayed at eye level, and complementary items like chips and salsa are typically right next to each other. 

That’s because these layout and design choices affect customers’ shopping behaviors. The way you organize and display your products can encourage shoppers to spend more time exploring your aisles and add more items to their carts. 

Don’t forget about lighting and music! These elements work together to create a comfortable environment that customers want to stay in. 

Related Read: How Are Grocery Stores Organized? (+ How You Can Optimize Your Layout)

8. Launch Strategic Promotions

Promotions are a great way to attract customers, boost your grocery store’s revenue, and increase inventory turnover. 

For example, let’s say you have a large batch of near-expiry baking mixes. Avoid spoilage and boost your average basket size with a baking sale! Launch a buy one, get one (BOGO) 50% off deal for your boxed baking mixes — or offer a mix and match deal where customers can buy a baking mix, frosting can, and sprinkles for one appealing price. 

Rely on your sales reports to identify products that are promotion-worthy. Slow movers, near-expiry items, or seasonal goods are usually great options. From there, use your POS system to select promotional products and ensure the discount applies automatically at checkout. 

Bonus Tip To Increase Your Grocery Store’s Revenue: Upgrade Your POS

We’ve given you lots of ideas to improve your inventory management, attract more customers, and boost your average basket size — but there’s one simple way to boost your grocery store’s financial performance: Upgrade to a modern POS system. 

This powerful tool has all the features you need to run your grocery store efficiently and profitably, including: 

• Real-time inventory monitoring
• Simplified purchase orders and receiving
• In-depth reporting and analytics
• E-commerce integration
• Promotions and a customer loyalty program

See how these features can take your grocery store to the next level by scheduling a personalized demo with one of our industry experts.