Retail P&Ls are under pressure as never before. The increasing costs of servicing customer needs in store and online, the advent of the Living Wage and increasing import costs post the Brexit vote – all these factors mean that retailers need to scrutinise every aspect of their P&L to release savings. This article explores an often-neglected dimension of costs: goods not for resale (GNFR) spend. There’s never been a more urgent need to review GNFR spend to ensure costs are being carefully managed.
However, GNFR spend is easy to ignore. Despite playing a fundamental role in the profitability of a company, it keeps a low profile. It can often be overlooked in favour of other more attractive areas such as new product launches, market share, digital strategy or customer data.
Perhaps this is because GNFR spend does not attract much attention. If you are paying too much for back-office goods and services, it will probably go unnoticed. Nobody ever got fired for spending too much on stationery… Or did they? At the end of the year, keeping GNFR costs in check could be the difference between making a bottom line profit or loss.