Staff shortages, rising wages and a downward trend in consumer spending are forcing industrial and retail companies to use robots. As technology advances, this labor replacement is becoming more popular, and the presence of robots is growing rapidly even in retail stores. Here’s how robots are helping businesses cut costs.

According to the International Federation of Robotics, over the past year, the number of industrial robots installed and put into operation at production facilities has increased by 31%. During the same period, the number of robots offering services in the trading floors increased by 37%. And the service they offer is valuable, because in many cases they not only get the business out of a difficult situation, but also drastically reduce its costs. Among the enterprises that have used a large number of robots is a warehouse in the city of Rosenthal in the south of the Netherlands. It makes extensive use of automatic cranes and self-propelled vehicles that pack clothes from Irish retailer Primark for shipment to stores in France and Italy. Warehouse has invested 25 million euros in this army of robots.

Mark Shirley, Primark’s head of logistics, believes the investment will generate €8 million a year for Rosenthal’s company for at least four years. In the end, he estimated that the use of automatic cranes increased the efficiency of the warehouse by 80%. And most importantly, self-driving cars have saved the company from having to compete with others for employees in the Dutch labor market, where margins have all but dried up. As Mark Shirley points out, “when you look at the industry as a whole, you see that entrepreneurs are moving in that direction to limit the risks posed by the workforce.” He estimates that the retail industry is 40% automated, but expects that percentage to rise to 60-65% over the next three to four years. However, the progress of robots is already visible in fashion stores, as well as in the food service industry, which employs millions of people and is currently facing rising costs for wages, energy and raw materials. Revealing is the recent warning from Amazon, the online retail giant, that store finances will be tight, especially in Europe.

The number of robots offering services in trading floors increased by 37%.

The approaches taken by European companies vary. Carrefour, for example, Europe’s largest food retailer, has vowed to cut costs, while Britain’s largest chain Tesco has admitted profits will be cut. On the clothing front, Inditex, which controls Zara stores, hiked prices to cover extra costs, and Primark, which controls AB Foods, announced it would cap price increases, albeit in many markets where inflation has hit double-digit levels.