How a Grocery Planogram Functions in Times of High Inflation

How a Grocery Planogram Functions in Times of High Inflation 150 150 Scorpion Planogram

As rising inflation continues to warp American consumer behaviors, grocery planogram tools are becoming more important. Since early 2020, retail grocery stores have needed to pivot to address a variety of challenges – from the emergence of curbside pickup and order online options to supply chain challenges and shifting consumer demands. Rising inflation is just the most recent challenge to emerge in the grocery space, and it is creating widespread disruption for grocers around the country.

With a new challenge comes an increased need for solutions. While a new planogram tool won’t curb the effects of inflation, it can dramatically improve a retailer’s bottom line. Understanding purchase trends and inventory can help grocery stores better meet the needs of their customers. In a time where the cheapest food option is the most desirable, understanding consumer spending with a planogram can retain existing customers and attract new shoppers.

 

Inflation at the Grocery Store

According to a recent McKinsey report, grocery inflation is the highest it’s been in ten years. With inflation comes an increased need – and demand – for higher wages and a more obvious presence of nearby competition. These factors contribute to a squeezing of grocery store profit margins. In most cases, profit margins for grocery stores are already extremely low, hovering somewhere between 1% and 3%. An even tighter margin increases risk of mass layoffs and closure.

From the customer’s perspective, the grocery store has transformed into a place of stress and anxiety. At-home food prices have increased almost 12% over the past year – the largest one-year increase since 1979. In response, grocery shopping habits are shifting. Customers are cutting down on “luxury” food purchases and prioritizing discount stores like Costco for everyday purchasing.

Given the current state of American inflation, customers will continue looking for ways to save money on routine purchases. In some cases, customers may reevaluate brand allegiance in order to find grocery providers that fit more comfortably into their budget. That’s where a grocery planogram can help.

 

How Can a Grocery Planogram Help?

An effective planogram tool can provide relief to struggling grocery stores. Space allocation and category management are essential in times of inventory- and purchase-related challenges. A planogram tool is essential.

For example, an effective planogram software can allow designs to be automated to select an optimized number of product facings and product order on a shelf. This can help drive customers toward specific products that may offer a wider profit margin. Similarly, planogram compliance can support sales by recording and presenting real-time inventory. This can help monitor pricing and demand. Understanding what a grocery store customer base is pursuing can help the retailer stock the most sought-after products.

Stores looking for a new grocery planogram should consider Scorpion Retail Planogram software. This tool cuts down on the time spent designing and testing planograms, allowing retailers to act on trends as soon as they appear. Inflation is likely to continue rising over the coming months, but a cost-effective planogram software can help address challenges – both today and in the future.

 

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