Adapt – that’s what the convenience retail industry has proven it can do best, evident in the huge growth of c-store (convenience store) sales – with reported channel earnings of more than $345 billion worldwide in 2020 and projected $448 billion by 2025, representing a 5.3% compound annual growth rate (CAGR).
Long before the global pandemic, c-store operators sought to innovate and modernize operations for differentiation amid a fiercely competitive market. The lingering impact of COVID-19 has compounded these efforts – along with an uptick in patrons increasing the frequency of their shopping visits: 67% of shoppers visit a c-store once a week or more, a two-point increase from last year, according to a 2022 research report by EnsembleIQ.
This means c-store operators must accommodate additional store traffic, while adhering to new norms and transforming how they conduct business - whether adjusting to new ways of operating, implementing stricter food safety requirements, or dealing with rising food costs and ongoing labor shortages. With these challenges comes an opportunity to seek solutions, like the Internet of Things (IoT), to resolve those issues with proven ROI.
For example, by equipping refrigerators and freezers with IoT-connected sensors, stores can monitor temperatures 24/7 and streamline the logging process. If temperatures deviate from optimal levels, the monitoring system alerts a manager to take quick, corrective action. Automating manual processes minimizes the risk of human error while freeing up employee time to focus on customer service, improving food safety procedures, and preventing inventory spoilage—all of which can bear costly repercussions. Conversely, IoT-enabled sensors can increase customer satisfaction by ensuring the ability to serve cold beverages for patrons, a huge value-add for profitability.
Here's a look at three quantifiable ways temperature monitoring of refrigerators and freezers provides value to your operations and positively impacts your bottom line.
Control Labor Costs and Better Manage Limited Resources
According to the National Restaurant Association, the workforce is projected to grow by 400,000 by the end of 2022. However, it still represents a 6% decrease against pre-pandemic levels, leaving operators to continue doing more with fewer resources. One reliable and efficient way to free up employee time is to automate temperature logging processes with IoT for safety and regulatory compliance, which consumes an average of 30 minutes of an employee’s day. It also reduces the risk of errors that inherently arise from manual tracking practices.
How does this all break down financially? Let's say you're paying an employee $15 an hour and they're spending 30 minutes a day manually logging temperatures. That will cost you $7.50 a day, and take the employee away from important tasks, like taking care of customers’ needs. While that may not seem like much on the surface, it adds up quickly when you factor in the number of days in a year and store locations. The cost could quickly amount to millions a year for large convenience retail store brands.
Prevent Food Loss and Spoilage Amid Rising Food Costs
Increased food costs are driving higher expenses and overhead. Therefore, it’s imperative that temperatures in refrigeration and freezer units are carefully monitored to prevent food spoilage and maintain quality. Considering that convenience store operators keep an average food inventory valued at $1,000 in their refrigerators and equipment failures can occur once every three years, preventing spoilage or loss becomes even more vital to operations. Employing IoT solutions could save substantial costs annually if you operate 100 stores.
Protect the Brand and Avoid the Repercussions of a Foodborne Illness Outbreak
In addition to food loss and spoilage, another potential nightmare is the price of a single foodborne illness. Not only is it expensive, but it could damage the business’ reputation with even greater implications. One outbreak could cost between $4,000 and $2.1 million depending on factors such as the severity of the incident, potential legal fees, and fines incurred. That means one foodborne illness on the low-end could cost operators hundreds of thousands of dollars.
Calculating the Value
Using the calculations above, the cost for wasted employee time, food loss/spoilage, and foodborne illness are almost $1M annually across all store locations.*
*Annual figures based on 365 days and 100 store locations
IoT opens up massive avenues for boosted productivities, empowering business leaders in the convenience retail store industry. Temperature monitoring of refrigerators and freezers is just a start. As the chart above illustrates, if it has the potential to save hundreds of thousands, consider the added cost benefits of utilizing an IoT platform rather than point solutions currently on the market.
For convenience and oil & gas brands looking to transform their business and elevate their customer experiences, MachineQ, a Comcast company, delivers a full portfolio of IoT-backed solutions that readily scale to drive innovation and growth.
Investing in an IoT platform can maximize ROI by leveraging the same network foundation of the temperature monitoring solution to power additional use cases, like building and energy management efficiencies. The bottom line for convenience store operators is increased value and lower total cost of ownership.