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Study: Out-of-Stocks Costing Food Retailers Significant Sales
JANUARY 07, 2009 --
A new research study shows that U.S. grocery stores, despite their efforts to improve out-of-stocks and efficiently manage shelf space, still have room to improve their merchandising practices as they are losing significant sales dollars because customers cannot find the products they wish to purchase.
The study, “What’s the Deal With Out-of-Stocks?” by IHL Group, Franklin, Tenn., says a “shockingly high number” of consumers – 16.6 percent – leave the story without purchasing a planned product, or even a substitute, resulting in retailers losing 68 cents in sales per customer.
“Retailers remain in denial when it comes to consumers’ perceptions of out-of-stocks,” Greg Buzek, IHL Group president, said. “Consumers don’t care why the product is not available. They come in with money to spend at the stores and have to leave either because the shelves are empty, there is no one to help get a locked item, or the staff simply cannot find the merchandise even though the computer system says they have it.”
Buzek said the study shows that 9 percent of consumers stopped shopping at one or more retailers over the past year because of the problem.
For supermarket retailers, the reasons given for out-of-stocks were:
Empty shelf – 27%
Stock, with no help – 16%
Stock, with no access – 16%
Promo mismatch – 18%
Other – 23%
Of the supermarket chains studied, Safeway had the best in-stock performance, with consumers experiencing an out-of-stock with at least one item 14.7% of the time. Food Lion and A&P were worst with 22.8%.
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