Inventory management is crucial for efficient grocery store operations. Grocers must satisfy consumer expectations and prioritize sales at the same time. This can get tricky, but there are ways to manage this. The best ways to manage inventory in the grocery industry include accounting for spoilage costs, shelf life, and the best- and worst-selling items among other factors.
Know the Balance of Your Best Products
One of the most important aspects of proper grocery management is the balance between your best-selling products and your worst-selling products. This is more complex than just taking note of what sells best versus what sells worst. Since not every food is the same, you should divide these categories by the type of food. Take note of the best- and worst-selling produce, perishables, boxed items, canned items, meats, seafood, breads and bakery items, and frozen foods. This is because proper inventory management is more than just tracking what foods you have; it is also managing ordering costs with spoilage costs. Ultimately, you should reduce any unnecessary expenses while still managing your regular orders.
Incorporate Forecasted Spoilage
Another way to reduce inventory costs is to track forecasted spoilage. When certain foods, like meats, seafood, produce, etc., are nearing their sell-by dates, make sure to promote or discount them to attract customers. This way you replace sold foods rather than unsold foods. Remember to flag items that must be sold quickly. Understandably, consumers operate on a “last-to-first” basis, meaning they’re likely to choose the items with the furthest sell-by date first. Keep this in mind with spoilage forecasts to reduce costs and food waste.
Don’t Overlook Shelf Life
It’s common knowledge that sell-by dates differ between orders. Therefore, it’s important to establish a contract with suppliers to deliver based on a minimum shelf life. Remember to account for this shelf life expectation when ordering. Build exception reports to track for safety stocks that might cross your ordering threshold. This will track all parameters to optimize costs and sales.
Implement an Updated POS System
Of course, this is a lot to consider. One of the greatest ways to track all of these metrics and data is to use an updated point-of-sale system. These devices are efficient in inventory management, including cost, location, and product shelf life. There are built-in cycle counters and automatic reorder generation, as well as product waste management and tracking. You can track any of these costs along with costs of material goods and cost of items sold.