A snippet from the Perspective…
The COVID-19 crisis has exposed flaws in grocery ordering practices and the supply chain. What lessons can we take from this? Insights from IHL Group offer some clues. Here’s how you can leverage Itasca Magic™ to come back stronger.
By Jason Wirl – Director, Marketing
INVENTORY ACCURACY in grocery was getting a lot better. Really.
Then COVID-19 happened in March, and four months of grocery inventory pipeline evaporated in two weeks of panic shopping by Americans. Grocery sales volume rose 27% for the month, but out-of-stocks soared too, in categories that have become emblems for the crisis, like cleaning supplies and toilet paper.
Supermarket operators that had worked diligently over prior years to fine-tune inventory replenishment disciplines faced a troubling realization. Their store systems and practices were not designed to respond to sudden demand as high as 4x, even 6x normal. Neither were they equipped to cope with non-deliveries, partial deliveries, and long delays that crushed perpetual inventory metrics.
Did we say inventory accuracy had been getting better?
Before the pandemic arrived, large retailers in North America, Western Europe, and some Asian countries had seen an average reduction of 17% in their costs of overstocks and out-of-stocks from 2017-2020. The improvements made had amounted to nearly $158 billion worldwide over three years, according to an Itasca Retail co-sponsored report from IHL Group, “Disrupted Retail – How the Pandemic Exposed Retail’s Hidden Inventory Distortion.”
Get the full Itasca Perspective and the IHL Report in one download (compressed file) – email required.