Retail cost reduction for sustainable growth

Retail cost reduction for sustainable growth

How retailers can cut costs sustainably while still setting up for future growth.


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With competition, technological advances and customer demands increasing, retailers are facing a period of financial strain. Many large retailers that have previously shown no signs of distress have, within months, found themselves in financial difficulty.

Retailers need to find a way to streamline their operations and achieve optimal efficiency in order to manage margin pressures and rising costs. At the same time, they need to find ways to fund new investments, improve the customer experience, and expand omni-channel capabilities.

Five steps to sustainable cost reduction

Instead of just thinking about the short- or medium-term benefits, KPMG looks at how sustainable cuts fit into the business strategy holistically, while planning for the future.

  1. Thinking about the future – starting with future growth strategy, and focus on an operating model that supports the growth trajectory.
  2. Hunting down hidden costs – familiarity and legacy processes can often lead to overlooking easy opportunities to increase efficiency.
  3. Finding new opportunities – the speed of change in the retail market provides opportunities to renegotiate contracts.
  4. Continuing delivering to customers – look at the end-to-end value of your processes and operations, to assess any negative impact on the end customer.
  5. Keeping up with regulation – ensure your operations are compliant and it is not impacted by cost reduction that could lead to reputational damage.

The impact on trust

Retaining the trust and confidence of customers is paramount to the continuing success of any retailer. Cuts to in-store staffing and other forms of customer service can lead to scenarios in which the relationship with customers can be irreparably damaged. A sustainable approach to cuts can not only safeguard the most important aspects of the relationship, but maintain high product quality and safety standards.

Download the report to find out more on KPMG’s future-ready approach to sustainable cost reduction.

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