Out-of-stock charges off base in produce, Wal-Mart says

04/17/2013 12:50:00 PM
Tom Karst

Desmond O’Rourke, president of Belrose Inc., Pullman, Wash., said that when Peterson managed the Wal-Mart produce business — the key thing wasn’t price but rather keeping produce in stock.

O’Rourke said Peterson was known for having solid contracts with suppliers to make sure that the produce was in stock. Since Peterson has left, O’Rourke said Wal-Mart has experimented with various sourcing systems that may have caused some problems.

As the years go by, Peterson said it may be tempting to think that vendor co-managed replenishment performed better than it actually did.

“People will tell you that back in the day that when Bruce was running (the program), you were never out-of-stock and everything was great,” he said. “That wasn’t true.”

There were many of the same problems then as there are today.

However, Peterson said suppliers in the vendor-managed system may have had more of a vested interest in keeping things in stock.

“The better the in-stock, the better their sales were,” he said.

Asked if the difficulty of local sourcing adds to the incidence of out-of-stock issues in produce, Wenninger said the local sourcing ensures product is as fresh as possible while also having sustainability benefits such as reducing food miles, the distance food travels from farm to fork.

“Our Global Replenishment System addresses the complexities that any grocer faces around fruits and vegetables by allowing us to see the life of the product so that we can replenish the right amount of product in the right place at the right time,” he said.

Peterson still marvels at the things Wal-Mart does well, and the scale they do it in. When Peterson left, the chain had 2,400 stores. Now it has 4,000 stores.

“When you start talking half a trillion dollars in sales, nobody has seen anything like it,” he said.


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ted benatovich    
boynton beach fla  |  April, 18, 2013 at 01:12 PM

i would love to discuss your problems. my background is supermarkets in western n.y.+ i have a vast knowledge in so in many departments, your problems can be solved profit to be made please feel free to contact me at 1-561-361-4102.WEGMANS IS A GREATEXAMPLE THANKS PLEASE CONTACT ME ANY TIME TED

PB    
April, 19, 2013 at 02:55 PM

PLAIN AND SIMPLE, WHEN THE VENDORS WERE MANAGING WAL-MART'S INVENTORIES, THEY WOULD ALWAYS MAKE SURE THEY HAD PRODUCT, THEY WOULD COVER THE CENTERS WITH SHORT BUYS FROM LOCAL SUPPLIERS-- AS IT STANDS NOW- NO ONE DOES THIS-- IF PRODUCT IS REJECTED- NO ONE RESPONDS WITH ANY PRODUCT TO FILL THE VOID??

Ben Hedges    
Virginia  |  April, 22, 2013 at 09:39 PM

Walmart's grocery volume depends on shoppers combining dry goods purchases with grocery and customers have started to drop the grocery side of their weekly visits. Grocery staffing is being cut as it contributes to less of the overall site sales, and frozen and dairy take priority over produce. Several Managers have told me only Hispanic and some Asian shoppers and big produce buyers and they tend to do their regular grocery shopping elsewhere. The demand just isn't there to justify the labor in the produce dept.

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