Eli5 How do grocery stores around the world afford to be fully/half stocked in a product 24/7 simultaneously even in small towns where not everything’s bought?

Question

Eli5 How do grocery stores around the world afford to be fully/half stocked in a product 24/7 simultaneously even in small towns where not everything’s bought?

In: 47

Answer 1

I was a Produce Manager for 5 years for a big chain Grocery Store.

We used precise inventory management to keep shrink down. Inventory shrink goals were to be between 2.5 and 5%. Anything more you would have to go through a correct action plan and hounded by your District Specialist and Loss Prevention until you fixed your numbers. Bad managers often would get moved around/bumped down if they couldn’t keep good numbers.

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There’s a ton of data involved when ordering product. Whenever you see someone with a scan gun, they can pull up sales and order data for whatever item they want. Let me give you perspective. Say I scan Bananas PLU code 4011. I can see that on Mondays I average the sale of 7 cases, Tuesday 8, Wednesday 10, Thursday 12, Friday 4, Saturday 12, and Sunday 13. Armed with this data and knowledge of my inventory shipments, I can order the correct amounts of product required to keep my shelves full.

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Sales forecasting is also a major factor in this process. The number crunchers over at corporate will run numbers of past years and forecast the amount of cases of product I’ll sell for the upcoming period. Based off sales forecasting numbers and my own site level knowledge, I make as accurate an order as I can of the product. Woe to the manager who UNDER orders on a sale product. This is why you there is so much waste in the produce industry.

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There’s a lot of waste mitigation options available for a produce manager. They can transfer product over to a sister department (say Fresh Foods/Deli). Perhaps the Deli can use some Lettuce or Tomatoes I have that are perfectly ripe. Perhaps the Chef Case can use this batch of zucchini in their soup of the day. Another option I have is to transfer it over to a sister store in the area. Too many cases of strawberries? Maybe the sister store down the road can use some!

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There’s a ton more nuances to the industry, but hopefully this gives you a good picture of what goes behind keeping your shelves full.