How Can Businesses Manage Costs Through Inflation?

There is a price squeeze everywhere you look. Energy costs are going up. Raw materials costs are going up. Labour costs are going up. And businesses of all shapes and sizes are looking to make savings wherever they can. Price increases are never popular, but as The Guardian reports, the cost of many supermarket staples are rising.

In The Guardian’s report, everything from coffee to dog food and peanuts to sanitary pads are seeing price increases. However, one of the key points The Guardian raises is that Tesco has found a new way of winding its toilet paper more tightly onto cardboard tubes. This reduces the size of its multipacks – without changing the number of sheets on a roll. And this has a big impact on Tesco’s bottom line.

Indeed, Tesco says the innovation will save 67 tonnes of plastic packaging each year and the reduction in size will also mean 17 fewer lorries are needed each week to transport the rolls from the supplier to Tesco’s distribution centres. That’s a massive reduction in plastic, and a massive reduction in energy needed to transport the toilet roll.

This innovative solution to reducing packaging and delivery costs should inspire other businesses to look at their own packaging and delivery operations to find solutions to reduce costs.

There are several key aspects involved in packaging costs:

• Packaging Materials– everything from void fill in your delivery boxes to your product packaging
• Marketing Materials– this includes any inserts you include within your packaging
• Storage & Delivery– think about your warehouse costs and the shipping costs involved at every stage of the supply chain
• Labour& Equipment– this could be a team of 100 working manually or a team of five using innovative and automated machines

So, how can you reduce your packaging costs? Here are our top three tips:

1. Use Less Plastic

Taking inspiration from our Tesco example, their product innovation allowed them to save 67 tonnes of plastic. This is huge. Especially when you consider that the UK recently introduced a plastic packaging tax. A whopping £200 tax per tonne. Tesco will have made a saving from using less plastic and reduced their plastic tax burden as a result. And if you can replace plastic with a more eco-friendly material, you may find that you’ll win more customers too, as 61% of consumers say they’re likely to switch to a brand that is more environmentally friendly than their current brand.

2. Make Fewer Journeys

Again, taking inspiration from the Tesco example we have already provided, if you are making less trips, you’ll be making a huge saving on your fuel costs. And the price of petrol and diesel is something that will be having a big impact on big and small businesses alike right now. So have a think about how you can optimise your delivery set up.

3. Automate Your Packaging Operation

If you currently do all of your packaging manually, have you considered automating all or part of the process? It’s not just about saving time, but packaging machines help you to reduce wastage. And less waste means improved margins.