The Right Coin Management Strategy for Grocers : Turn Hidden Costs into Profits
The grocery industry is constantly changing. Grocers must adapt to changes in consumer behaviours and expectations, online competitors luring away once-loyal shoppers and economic uncertainty that threatens already razor-thin margins. With that in mind, the pressure is on to control costs and find new ways of increasing profitability. Fortunately, grocers need to look no further than their front-of-store to find the solution.
Coin Management: Exposing a Hidden Operating Cost
According to the Food Marketing Institute, employee wages and benefits account for the largest portion of operating expenses. Cash management – especially coin handling – contributes to a grocers cost of doing business, claiming valuable staff resources that are already in short supply.
For example, grocers often struggle with the high cost and time commitment of managing coin within their stores, including time-consuming tasks such as:
• Ordering new coin for the day or week
• Managing cash drawers
• Filling coin hoppers in self-checkout lanes
• Providing coin for use at the service desk
• Processing coin from store-owned vending machines
There is no doubt that grocers could benefit from a more efficient and cost-effective system for managing the cashiers’ cash drawers and other in-store coin related activities to minimise costs and increase productivity.
Extend the Benefits of Self-Service Coin Redemption: Reduce Operational Costs
Self-service coin counters are not only used by grocers as a revenue generator, but also as an effective way of recycling coin in their own operations – saving thousands annually. For example, when grocers lease or own a machine, they have access to the redeemed coins inside, and can use these coins to restock cash drawers and coin hoppers in self-checkout lanes.
The cost benefit is twofold: reduce pick-up and processing fees and eliminate the need to buy coin from banks or armoured carriers, further increasing ROI. By having access to their own coin, grocers can save up to £110.74 per week for one store, which leads to a huge £5,758.24 per store each year.
Turn a Value-Added Differentiator into a Profit Centre
In today’s highly competitive marketplace, services like self-service coin redemption contribute to enhancing customers’ in-store experience. But, as a value-added differentiator, this service can also increase foot traffic and the amount of pounds that customers spend in-store; contributing to the store’s overall profitability.
With the right procurement strategy, grocers can further expand the profitability potential of self-service coin redemption. When evaluating procurement models, grocers should keep in mind that purchased and leased coin machines deliver higher ROI. The cost of the equipment and fees is typically recovered in as little as twelve months – and grocers retain a greater percentage of the profits, turning coin operations into profitability.
Tesco, the largest grocer in the UK, has installed self-service coin redemption in stores across the country. Not only have they been pleased with the benefits that self-service coin redemption brings to the store and customers alike, they have also been impressed by the working relationship with Cummins Allison. Stephen Law, Assets and Estate Buying Manager for Tesco, said “We initially selected Cummins Allison because of their coin counter’s small footprint and their ability to fit into our smaller format stores. What we discovered, however, was not just a great supplier, but also a true partner. A forward-thinking industry leader who is truly invested in Tesco success.”
Eliminate Costs & Maximise Profitability: It’s All about Control
For grocers, improving their coin managing strategy depends upon gaining control of costs, productivity and profitability. Self-service solutions put that power in their hands delivering more value – and money – for their grocery operations.
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About Cummins Allison
Cummins Allison is the leading innovator and provider of currency and coin handling solutions. Our world-class sales and service network includes hundreds of local representatives in more than 50 offices in North America, 6 wholly-owned subsidiaries and is represented in more than 70 countries around the world. For more information about our award-winning solutions, visit www.cumminsallison.co.uk.
