The Right Coin Management Strategy For Grocers: Turn Hidden Costs Into Profits

Coins
Jim Weaks
Jim Weaks

by Jim Weaks/ VP, Cummins Allison

The grocery industry is constantly changing. Grocers must adapt to changes in consumer behaviors 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 grocer’s 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 burdensome tasks such as:

  • Ordering new coin for the day or week
  • Managing cash drawers
  • Filling coin hoppers in self-checkout lanes
  • Providing rolled coin for use at 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 minimize 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 with a coin packaging solution, they can package the coin from the machine and use it to restock cash drawers.

The cost benefit is twofold: reduce pickup and processing fees and eliminate the need to buy coin from banks or armored carriers, further increasing ROI. By packaging their own coin, grocers can save up to $144.20 per week for one store, which leads to a whopping $7,498 per store each year.

Turn a value-added differentiator into a profit center

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 dollars 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.

As Clint Woodman, VP, Woodman’s Markets notes, “Self-service coin machines are part of our customers’ shopping experience. The self-service machines provide a fast, efficient service, enhancing the customer in-store experience and driving income.”

Eliminate costs and maximize 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 deliver more value—and money—for their grocery operations.


Keep reading:

Guest Column: Your Shopping Experience Needs To Offer Everything

HR & Benefits News: Current Employee Handbook: A Must for Grocers

Larkin: Independent Grocers Are Winning The So-Called ‘Grocery Wars’

 

About The Author

A word nerd, grocery geek and two-year member of The Shelby Report. She is a proud new homeowner and a great lover of avocado toast.