An Out-of-Stock is a lot more than just an empty shelf. In the mind of the consumer, an Out-of-Stock occurs any time they come into the store ready to buy, but leave without purchasing an item for a reason other than it is priced less elsewhere.
Here are some of the Out-of-Stock problems noted by consumers:
Product locked up or on too high a shelf and no one to help
Found someone to help, but they can’t find merchandise the system says is in-stock.
Price on the shelf doesn’t match the price online or in the ad
Some other reason not related to price.
An Overstock, on the other hand, is any situation wherein a retailer has on hand more stock of a particular item than is supported by current demand for that item. The two main resolutions for these Overstocks are discounting and spoilage, one of which must take place to reduce that Overstock.
Both Out-of-Stocks and Overstocks are a problem with execution, with the result being either a sale lost to that retailer’s competitor (in the case of an Out-of-Stock), or a hit to the retailer’s bottom line (in the case of an Overstock).
Table of Contents
Summary of Findings
2.0 Management Summary
3.0 A Global Issue – Worldwide Impact
3.1 Total Inventory Distortion Worldwide
3.2 Cost of Out-of-Stocks Worldwide by Reason
3.3 Cost of Overstocks Worldwide by Reason
4.0 North America
4.1 Total Inventory Distortion in North American
4.2 Cost of Out-of-Stocks in North American by Reason
4.3 Cost of Overstocks in North American by Reason
5.0 Europe/Middle East/Africa
5.1 Total Inventory Distortion in EMEA
5.2 Cost of Out-of-Stocks in EMEA by Reason
5.3 Cost of Overstocks in EMEA by Reason
6.1 Total Inventory Distortion in Asia/Pacific
6.2 Cost of Out-of-Stocks in Asia/Pacific by Reason
6.3 Cost of Overstocks in Asia/Pacific by Reason
7.0 Latin/South America
7.1 Total Inventory Distortion in Latin/South America
7.2 Cost of Out-of-Stocks in Latin/South America by Reason
7.3 Cost of Overstocks in Latin/South America by Reason
8.0 COVID-19 Impacts and Previously Hidden Out-of-Stocks
9.0 Key Solutions
10.0 Research Methodology
What segments are included in the totals?
For those who have purchased this research in the past it was limited to traditional retail segments. This year we expanded to include the hospitality segments as well. In total these are the segments included worldwide with some example retailers to give you a flavor of the types of companies in each segment.
Food/Grocery (Kroger, Safeway, Trader Joe’s, Wakerfern, Tesco,)
Drug Stores (Walgreens, CVS)
Superstore/Warehouse Clubs/Hypermarkets (Walmart, BJ’s Wholesale, Costco, Auchan)
Mass Merchants (Target, Meijer Stores)
Department Stores (JC Penney, Sears, Kohls, Kaufaf, Marks and Spencer)
Specialty Hard Goods (Home Depot, Lowes, Best Buy, Rooms to Go, Canadian Tire)
Specialty Soft Goods (H&M, Limited Stores, Wet Seal)
Convenience/Gas/Forecourt (Chevron, Exxon,)
Fast Food (McDonald’s, Subway, Burger King, Pizza Hut, Taco Bell)
Bar/Restaurant (Applebees, Buffalo Wild Wings, Chipotle)
Lodging (Marriott, Sheraton, Hilton)
Entertainment:Casinos and Cruises (Carnival, Harrah’s, Wynn, Caesar’s Palace)
Entertainment:Museums, Theme Parks, Theaters, Others (Disney, Universal, AMC, Carmike)
The total for Inventory Distortion seems a lot larger than last time, why is that?
The primary reason is the inclusion of the hospitality segments from Fast Food to Entertainment.
Did mature retail countries make any progress in Inventory Distortion since the last time you measured?
Yes, in fact in North America the traditional retail segments improved their position by over $10 Billion. Worldwide, however, retail expanded at a faster rate in the emerging countries and the distortion grew at a rate that eclipsed the amounts recaptured in North America and Europe.
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