Out-of-stock problems deeply affect sales

05/24/2013 09:15:00 AM
Armand Lobato

Armand LobatoArmand Lobato,
The Produce Aisle
"Sorry, we’re out of that item today.”

Those seven words are the not the worst thing you can say to a customer while they shop your produce department, but it certainly ranks near the top.

The phrase is perhaps a close second to verbally berating the poor customer and chasing them out of your store, whacking them on the head with a broomstick the entire way.

Either way, you’re chasing your customer away. Maybe for good.

Out-of-stocks. The term is very different from “not in season.” At least with seasonal gaps, customers understand, for example, that pomegranates are available starting in late summer. They realize that it isn’t just your store that is out of stock, but every other produce department as well.

Although other possibilities account for out-of-stocks (such as late trucks or rejected loads) when something is out of stock, most of the time it is because of an ordering error at store level: A produce manager miscalculated how well an ad item would sell or typed in ‘10’ on the order keys instead of ‘100.’

That’s when you are forced to hang the little orange-starburst sign that says, “Oops, we goofed!”

The trouble with out-of-stocks is just that: No produce inventory available to sell. Therefore, overall sales are reduced and customer satisfaction and confidence declines. When this happens with enough frequency, customers will elect to shop elsewhere. It’s little wonder why out-of-stocks are tops on store and district managers’ radar. They’re protecting the business at its core.

The next worse thing to say? “Come back on Tuesday ... we get a new delivery then.” This is little consolation. Put yourself in the customer’s shoes. Would you make a special trip on Tuesday, spend the time and gas to pick up the one produce item that the store should have stocked in the first place?

The out-of-stock subject gets even deeper.

Recently while traveling on a train into Chicago to attend a trade show, I spoke to a fellow passenger who was in the retail clothing trade. We traded stories on this subject and he said something that I thought fit well into fresh produce: “If a customer doesn’t see something (meaning an out of stock item), then it doesn’t even exist in their mind in the first place.”

Hmmm. So if a produce department has out-of-stocks, even on lesser-profile or non-ad items, and the shelves are simply faced to cover up the voids, then those items aren’t even in the customer’s mind. Out of stock on red potatoes, lemons, mangoes … and customers see nothing? It defeats our purpose.

Every produce manager’s goal should be simple: No out-of-stocks. Ever. And if you are — fix it.

Armand Lobato works for the Idaho Potato Commission. His 30 years of experience in the produce business span a range of foodservice and retail positions.

armandlobato@comcast.net

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