Grocery inventory management: battle against waste must rumble on!
In the second part of our “ace your inventory strategy” series, retail expert, Mike Donnelly, looks at how businesses in the food sector have adapted their approach to grocery inventory management to optimise shelf lives and minimise waste.
In 2016, the Grocer launched one of the biggest campaigns against food waste in retail history. 2 years on and the UK’s leading FMCG has succeeded in embedding a culture of waste reduction across the entire food industry. However, the war is far from over: grocers must optimise their approach to grocery inventory management to eradicate waste from their business once and for all!
When the Grocer kicked off the “waste not want not” campaign, the true extent of the waste problem was only just coming to light. It was not until the food charity, Wrap UK, revealed that over 1.7 million tonnes of food were going to waste each year in the UK alone that retailers fully understood the challenge they faced. The most concerning realisation were that a staggering 56% of this waste mountain was totally avoidable!
Thankfully, waste is no longer seen as a bi-product of day-to-day business. Instead, waste reduction is now accepted as a strategic direction which delivers real results: both financially and in terms of customer satisfaction.
Retailers have only scratched the surface
From food redistribution schemes to intelligent fridge cameras that help prevent consumers from over-buying, retailers have embraced waste reduction as an opportunity to innovate. However, while such steps have contributed to delivering an overall waste reduction, few retailers have been brave enough to tackle one of the biggest sources of avoidable waste: ineffective grocery inventory management processes.
Take for instance the recent reports of retailers removing ‘best before’ dates from certain fruit and vegetable products in a bid to prevent consumers confusing them with ‘sell by’ dates. This probably will help retailers reduce waste. After all, from the perspective of the consumer, by removing the best before date, retailers are seemingly prolonging the shelf life of the product. But are expiration dates the full extent of the problem? The answer is: most certainly not!
Retailers must do more than merely treat the symptoms. If a product is a frequent cause of waste, questions have to be asked as to why: is it because the replenishment process is inefficient? Is the product allocated correctly? Was too much inventory ordered in the first place? Ultimately, to achieve real waste reductions, retailers must tackle the problem at its source.
Grocery inventory management processes must ensure product freshness
The food industry should be applauded for the progress made in just two years. However, in order to achieve the waste reduction goals retailers have set themselves, the food industry must adopt a fresh approach to the way they manage fresh products within their supply chain.
In order to prevent waste, industry leaders must be proactive and take appropriate action to improve inefficient processes. For many retailers, this will mean they not only need to focus on waste but also on maximising product freshness throughout the chain. However, by putting in place more effective grocery inventory management processes retailers will not only attack the true causes of avoidable waste but also create greater value for customers.
Given that the issue of waste is a top priority for the industry, what is your business doing to prevent food waste in your business?