Overview of the Food Retail Industry
Food is one of the key categories of spend and accounts for a majority of the contribution to the GDP globally.
The food retail industry is experiencing steady growth and is marked by the change in customer preferences, a radical shift toward online shopping, and the rising global population. The food retail space comprises of convenience stores with products for immediate use such as perishables, groceries, general merchandise, and health and beauty care. The noticeable shift toward organized retail is compelling business providers to leverage opportunities and offer reliable products while compromising on the costs. Apart from the traditional factors, shifting consumer preferences toward brand loyalty and the increasing supermarket shopping culture are influencing the growth of the food retail space globally. Although the food retail industry is witnessing considerable growth, several factors may influence the growth of the industry. They include:
Lack of supply chain effectiveness: Supply chain plays a prominent role in the retail industry – right from the initial stage of manufacturing to the final consumption of products. Any disruptions in the overall supply chain will not only have an adverse effect on the overall supply visibility, but it may further affect the business efficiency as a whole. To address these concerns, organizations should ensure supply chain effectiveness in their products and service offerings to enhance operational efficiency and maximize their ROI.
E-commerce platforms: In the recent years, Amazon’s grip on retail products has witnessed a considerable growth, accounting for half of the overall retail growth. Leading organizations offering in-store product offerings saw a radical decline with the growth of robust e-commerce platforms. To successfully compete with these e-commerce giants, food retail companies should emphasize on innovations.
To address these challenges and keep track of their current spending patterns, businesses are utilizing spend analysis solutions. Spend analysis offers better insights into the spend data and helps businesses identify potential opportunities to allocate their spend wisely. Moreover, spend analysis further focuses on gaining better visibility into the spend patterns and manage the spend to curtail maverick expenses.
The Business Challenge and the Journey
The client, a renowned food retail client, wanted to analyze the spend patterns and refine their marketing spend to meet the business requirements. While managing spend becomes a major concern for the organizations, the client wanted to identify the potential opportunities for spend and ensure that they curtail any maverick spend. With the help of the spend analysis solution offered by SpendEdge, the client also wanted to seek ways to efficiently manage risks associated with additional spend and aid the organization in devising a short-term, and medium-term spend strategy.
To offer reliable services to the client while improving savings, SpendEdge’s spend analysis experts carried out extensive research methodology across the food retail space. The research methodology comprised of interviews and discussions with prominent stakeholders in the industry. Moreover, to improve the process efficiency, SpendEdge’s spend analysis experts also compiled information across a wide array of proprietary resources such as paid industry databases, industry forums, and company presentations.
SpendEdge’s spend analysis solution helped the food retail client generate accurate, timely, and consistent visibility into the spending patterns and identify critical savings opportunities in an easy manner. Moreover, the solution also offered relevant insights into the procurement activities and rectified potential bottlenecks in terms of savings weak, prices vary, and purchasing overlaps. The food retail client was efficiently able to compare the spend with that of the competitors and prioritize savings opportunities.
Key fundamental questions answered in this spend analysis solution include:
During the course of the spend analysis engagement, the food retail client was able to compare the spend profile to aggregate peer group data and make informed decisions. The client kept up-to-date spend records that helped them control maverick as well as fraud and other non-complaint activity.