Five Key Challenges for Food Retailers

The last few years have included incredible highs and the deepest of lows for food retailers, from finding workers during the pandemic to tackling widespread supply chain disruptions and rising costs. Organizations have been forced to navigate increased competition, accelerate digital transformation initiatives and adapt to changes in consumer preferences and behaviors.

What lies ahead? Accruent recently commissioned a study of the food retailer sector to understand what challenges await, from continued margin and cost pressures to being held back by legacy technology to the increased risk of cyber threats.

Continued Margin and Cost Pressure
While revenues are increasing, food retailers are still experiencing inflationary pressure, attributed to strong demand, higher-than-average wage growth in the industry and ongoing labor shortages. Challenges stemming from labor shortages will likely have the longest-term impact.

According to a McKinsey report, over one million roles remain open in the U.S. retail industry. Competition for workers is fierce, meaning workers can demand higher wages. Moreover, more and more retailers are offering upgraded incentives and benefits such as bonuses and tuition assistance to make positions attractive. These benefits add costs on top of already significant wage growth.

Technology will play an integral role in helping retailers to overcome labor challenges. Automating manual processes can increase productivity, reduce costs and improve the customer experience.

Digital Transformation Brings Cybersecurity Risks
The retail sector has long been an attractive target for cyberattacks, as operators hold a significant amount of sensitive customer data. The frequency and sophistication of cyberattacks continue to increase.

This is partly due to the acceleration of digital transformation and online shopping, which have led to more vulnerabilities and inroads for cybercriminals. Retailers do not need to be directly targeted for sensitive data