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by Justin Guinn,
Market Research Associate
Last Updated: August 27, 2015


Grocery stores have a difficult combination of high-volume sales and an inventory that largely consists of perishable goods. Almost all grocery stores are automated to some degree, although the smallest stores may be limited to point of sales (POS). The three biggest issues for most grocery stores are inventory management, POS and payroll. More sophisticated stores have began to focus on customer relationship management (CRM).

Grocery stores may receive multiple deliveries from multiple vendors every day. An efficient and accurate receiving system lets grocers verify new stock and enter it for immediate sale. Grocery stores and supermarkets typically have multiple checkout locations. While most items have UPC barcodes, some items, such as produce, are often keyed in by the cashier. The stores often employ minors after school, on weekends and during school vacations. Work schedules and breaks are regulated for minors; the payroll systems should track minors’ hours, notify a manager if a minor is close to a violation, and complete all compliance reports. Recently, some supermarkets and grocery stores have started using email, text messaging and social media to promote customer loyalty.

Accounts payable and general ledger are standard. For most stores, accounts receivable are also standard but some stores have running accounts for frequent customers. Most grocer point of sale software are installed on-premise. While software as a service (SaaS) options are available, there is generally little benefit for cloud-based POS software for grocers due to the investment required in POS terminals.

Common Features of Grocery Store POS Software

Grocery stores and supermarkets should evaluate the following functions, in addition to general business operations, to meet their unique requirements:

Sales on account Increasingly uncommon, some grocery stores and supermarkets still maintain open accounts for frequent customers. The POS should update the accounts and the systems should prepare bills as required.
Check processing The system should track the customers that have valid check-cashing privileges. It should frank checks at the POS station. Advanced POS software for supermarkets will image and remotely deposit the checks.
Code look up Bulk items items such as produce are often not labeled. Cashiers need a look-up function to find the correct code. Advanced systems will have a picture as well as a description and will enter the code into the POS directly.
Coupon redemption The application needs to process coupons at check out. Advance systems will verify the coupon against purchased items and will calculate percentage-off amounts.
Coupon printing Many grocers provide coupons at check out. Advanced POS systems produce coupons based on the items purchased.
Self checkout Some stores allow customers to scan and pay for their own purchases. Self checkout must provide an oversight station and should be fully integrated with the security system.
Sell per unit weight The program should integrate with scales at check out. The cashier enters the code for the item and weighs it. The system calculates the final price and prints the weight, unit cost and final price on the receipt.
Delicatessen system Stores with full service delicatessens benefit from a deli POS software system with integrated scales and barcode printing systems. The server places the product on the scale, weighs it and the system generates a label with the weight, price and a barcode.
Suspend transaction The solution should be able to suspend a transaction and move to another transaction. Later, the original transaction can be amended, edited or cancelled.
Minor-aged employee management The system must track the schedules of minor-aged employees and check the hours worked and breaks against regulations. The system should notify managers if scheduled hours would result in a violation. The system should produce any required compliance reports.
Inventory receiving The system should produce inventory receiving reports by vendor throughout the day as required. It should be able to process advance shipment notifications (ASN) to speed the receiving process.
Spoilage reporting Grocery stores and supermarkets sell perishable goods; the “sell by” dates must be tracked, expired inventory must be collected and disposed of and the process properly documented.
UPC code catalog Building an inventory from scratch could take weeks. The inventory system must include a UPC code catalog with descriptions for common items to save time in building the inventory.
Bottle deposit tracking Eleven states have beverage bottle restrictions; twenty-two have plans under consideration. The supermarket store software needs to track deposits and bottle sales, and produce compliance reports.
Cash drawer management The solution should support two-person cash drawer counting. It should be able to assign cash drawers to POS terminals so each cashier can bring a counted drawer at the beginning of a shift.
Security system integration The system should integrate the POS system and security systems, linking security recordings with transaction records.
ID scanning If the store sells restricted items, generally alcohol, tobacco or pharmaceuticals, the application should scan and retain ID information for buyers and verify that the format of the ID is correct. However, it is often impractical to validate the IDs against government databases.
Employee Auditing One of the key reports is the employee audit, which looks at profitability and transactions by employee. This helps protect the bottom line and helps prevent inventory shrinkage by holding employees accountable.
CRM Supermarkets are evolving from having check-cashing cards to full-featured. In particular, they are adopting social networking by establishing Facebook pages and tweeting coupons to registered customers.
Customer loyalty programs As part of CRM and to further solidify customer relations, many stores have customer loyalty programs. The store system should track sales history and monitor loyalty program points awarded and redeemed.
Promotional pricing The solution should allow sale and promotional pricing. The pricing should change in the POS and inventory automatically at a specified time and date, if desired.

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