Fruit and vegetable aisle: what is an out-of-stock when the product is there but unsellable?

Two out-of-stocks in the same aisle

In most aisles a product is present or absent. In fruit and veg there is a third state: present but unsellable. Damaged tomatoes, wilted lettuce, over-ripe bananas take up the crate, and the shopper leaves without taking any. For them it is an out-of-stock: the reactions measured by Gruen, Corsten and Bharadwaj (substitute, delay, buy elsewhere, give up) apply just the same.

This quality out-of-stock is invisible to the store: book stock is positive, the crate is not empty, and a glance from the aisle does not catch it.

Why this aisle is different

• No reliable book stock: products sold by weight, natural losses, daily sorting. The system does not know what is on display (phantom stock).
• A few days of life, sometimes one day for fragile produce: safety stock becomes waste.
• Quality that degrades on display, under shoppers’ hands, faster than in the cold room.
• An image aisle: it is often at the entrance, and its state sets the impression of the whole store (out-of-stocks and loyalty).

Holding the aisle by rhythm

The trade-off is the one in fresh aisle: reduce out-of-stocks without increasing waste: you do not fix the out-of-stock with quantity. In fruit and veg it translates as:

1. Several fills a day, in small quantities: a crate half filled three times beats a crate full in the morning whose bottom spoils.
2. Sorting at every pass: removing what is unsellable is part of replenishment. A sorted, half-full crate sells better than a full mixed one.
3. Stock in the cold room, not on display: quality keeps there, and the late-afternoon pass finds what it needs to rebuild the aisle.
4. A late-afternoon pass, before the evening peak: that is when the aisle is most degraded and most visited (organise replenishment).
5. Mark down early rather than throw away late: produce still good but no longer handsome goes at a reduced price in a separate space, and frees the crate.

Counting differently

The usual out-of-stock count records absent SKUs. Here it records two things, from close up, at a fixed late-afternoon time:

Finding	Counted as	Action
Empty crate	out-of-stock	replenish from the cold room, or order
Crate present, produce unsellable	quality out-of-stock	sort, mark down, replenish
Crate present, produce sellable	available	nothing

The aisle’s rate is the sum of the first two lines, divided by the number of SKUs. Tracked daily alongside waste, it says whether the aisle is under-ordered, over-ordered or badly replenished, with the same reading as for fresh. The general method is in on-shelf out-of-stock rate: how to calculate it.

The products to protect

Not all fruit and vegetables weigh the same. Everyday produce (tomatoes, bananas, apples, lettuce, carrots, potatoes, onions) is what makes shoppers change store when it is absent or poor. It deserves a stricter target than occasional or seasonal produce, and a place in the 5 pm pass.

A worked example (hypothetical)

Take a fictional fruit and vegetable aisle of 120 SKUs. A count at 6 pm records 6 empty crates, that is 5%, which looks acceptable. The same count made from close up also records 14 crates whose produce is no longer sellable: the real rate is 17%. The store moves from one to three fills a day, sorts at every pass and marks down at 4 pm. The expected scenario is a real rate brought below 8%, with waste stable or falling, since produce is sold before it spoils. The figures are illustrative.

What shopper reporting changes

The shopper is the only judge of whether produce is sellable: they decide not to take it. For them, a crate with nothing worth buying is a missing product, and that is how they can report it with ShelfAlert. A report on a SKU whose crate is not empty is the sign of a quality out-of-stock, which neither stock records nor a distant count show. 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).
• Corsten, Gruen, “On Shelf Availability”, 2004: summary.