Mastering Margins for an Independent Multi-Department Supermarket (AU/NZ)
Independent supermarket | grocery (AU/NZ)
Sales were strong, but profits didn’t match. With thousands of SKUs and frequent deliveries, inventory and supplier costs were effectively a “black box.” The owner was repeatedly surprised by large supplier bills and couldn’t confidently explain where profit was leaking.
The Challenge
What the client was facing
The client’s growth exposed three major blind spots:
- Department-level margin invisibility: A single combined P&L hid performance differences between low-margin and high-margin categories, making it impossible to pinpoint underperforming areas.
- Shrinkage and waste not tracked: Spoilage and theft weren’t being recorded consistently, which distorted inventory values and created inaccurate end-of-period results.
- Supplier reconciliation overload: With 50+ suppliers, discounts and “special buy” pricing weren’t being verified consistently, and invoice handling was consuming ~15 hours/week.
Our Solution
How we solved it
We shifted the supermarket from reactive stock counting to data-driven financial operations.
- Departmentalised Reporting (Segment P&L)
Restructured the chart of accounts to track sales and COGS by department so the owner could review gross profit % by section each month and act quickly. - Automated Supplier Invoice Workflow (AP Discipline)
Implemented a streamlined accounts payable process with digital invoice capture and validation reducing errors, improving GST accuracy, and ensuring supplier pricing mismatches were spotted earlier. - Waste & Shrink Monitoring System
Introduced a daily waste log routine aligned with reporting. By treating waste as a tracked expense and reviewing it regularly, the team uncovered a recurring loss in the meat department linked to an equipment issue something that had gone unnoticed.
Results
Results & metrics achieved
- Margin recovery: Identified margin slippage in produce linked to supplier price changes and enabled a pricing correction recovering ~$4,000/month in profit.
- Audit-ready inventory: Transitioned to a rolling stocktake model, achieving near year-end accuracy and reducing tax-year adjustments and clean-up effort.
- AP efficiency: Reduced supplier invoice admin time by ~80%, freeing internal staff to focus on store operations and customer experience.
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