Out-of-stocks and loyalty: when does a shopper change store?

The first out-of-stock already costs one shopper in three

The study by Gruen, Corsten and Bharadwaj on 71,000 shoppers facing real out-of-stocks gives the immediate reaction: 31% buy the product in another store, 9% give up, 15% delay. That third who leaves is already a loss of loyalty: the shopper discovers a competitor, compares, and may stay there. National barometers confirm the order of magnitude: 32% switching retailer measured by GS1 Italy and ECR Italia in Italy, 48% switching brand measured by AECOC in Spain, and in the UK the Retail Economics and DHL audit finds an out-of-stock item in one grocery trip in five.

These figures describe an isolated out-of-stock. Loyalty is lost on repetition.

The mechanism of the switch

A regular shopper shops with a short, stable list: the ten to twenty products they buy every week. Their loyalty rests on the certainty of finding them. The switch follows a sequence managers know well:

1. First out-of-stock: the shopper substitutes or comes back later. Annoyance, no consequence.
2. Second out-of-stock on the same product: the shopper buys the product elsewhere and adds other shopping to that trip.
3. Third out-of-stock: the competing store becomes the main store for that category, then for the basket.

The store is never told: the shopper does not complain, they organise differently. That is why the deferred cost of out-of-stocks appears in no report, while the ECR France / IRI barometer already puts the immediate cost at 45 baskets lost per day and per hypermarket.

The products that decide loyalty

Not all products weigh the same in loyalty:

• everyday products bought frequently (milk, bread, eggs, coffee, basic hygiene products): an out-of-stock there is experienced as a failure of the store;
• products without an acceptable substitute (infant milk, a coffee or cosmetics brand the shopper is attached to, specific foods): an out-of-stock equals a trip elsewhere;
• promotions: the shopper who came for the missing promotion feels cheated.

Conversely, low-attachment products (sugar, oil, toilet paper) are substituted with no effect on loyalty. So it is the first two families that must be kept at an out-of-stock rate well below the store average, as explained in what does a shopper do in front of an empty shelf.

Protecting regular shoppers

Three actions, in order:

1. Identify the store’s fifty loyalty products: those appearing in the largest number of regular baskets, not those making the most turnover.
2. Give them their own out-of-stock target, for example under 2%, with facing, reorder point and cycle counting set accordingly (out-of-stock dashboard).
3. Detect and refill fast: on these products, the duration of the out-of-stock matters more than its frequency, because every hour exposes regular shoppers.

An example

Neighbourhood supermarket, 6,000 regular shoppers. Semi-skimmed milk, present in 40% of baskets, is missing three evenings a week for two hours. Each evening, about 80 regular shoppers find it absent. Over a month, several hundred shoppers have lived the sequence two or three times. If 5% of them move their weekly shopping, that is dozens of baskets a week lost for good, for an out-of-stock fixed by a 5 pm replenishment pass.

What shopper reporting changes

The shopper who reports a missing product with ShelfAlert does exactly the opposite of leaving: they tell the store what they expect. The manager sees the products their regular shoppers ask for, treats them first, and turns a reason to leave into proof of listening. 14-day trial, no payment card: see the plan for store managers.

Sources

• Gruen, Corsten, Bharadwaj, “Retail Out-of-Stocks: A Worldwide Examination”, GMA, 2002: full study (PDF).
• Retail Economics and DHL, The availability effect report 2026.
• GS1 Italy / ECR Italia: how shoppers react to an empty shelf.
• AECOC Shopperview: 48% of shoppers switch brand.
• ECR France / IRI out-of-stock barometer: LSA, out-of-stock rate.