How Grocers Can Reduce Throwaways and Over-Ordering This Holiday Season
While much has been said about asset protection and loss prevention issues affecting the broader retail industry during the holidays, grocers and supermarkets face a number of unique problems that receive far less attention.
One such challenge is an increase in food waste. It’s difficult to predict how much demand will increase during the holidays. This can lead to over-ordering and wasteful throwaways.
We’ve assembled a short list of solutions and products that can help grocers combat over-ordering and throwaways.
Use discount displays
Using discount shelves — contrary to a popular opinion among grocers — have been shown to increase sales and customer satisfaction.
A report from the Natural Resources Defense Council (NRDC) examining why nearly half of America’s food supply is ending up in landfills cited discount shelves as a viable solution to preventing throw-aways as a result of over-orders.
“Retailers who have tried offering near-expiration items at a discounted price report that it does not reduce sales but rather raises customer satisfaction.” — Wasted: How America Is Losing Up to 40 Percent of Its Food from Farm to Fork to Landfill – The Natural Resources Defense Council (NRDC)
According to the report, retailers using discount shelves to sell near-expiration items at a discounted price did not report lost sales as one would expect. In fact, discount shelves boosted consumer satisfaction––a finding that aligns with the broader rise of discount grocery throughout the country. According to Forbes, the number of discount grocery stores increased 17.6 percent from 2011 to 2016. The same report also shed light into consumer behavior around discounts as well, finding that 68 percent of Americans say they enjoy taking the time to find bargains.
- Experiment with discount shelves to as a simple solution to over-ordering that appeals to deal hunters and regular shoppers alike.
- Use any existing planograms and in-store analytics tools to place discount shelves in optimal areas.
Donate more food
Food donation has become a large part of the modern retail and grocery world and offers supermarkets an opportunity to get involved with local charitable organizations during the busy holiday season. But despite the opportunity, 10 percent of the 133 billion pounds of wasted food produced each year is lost at grocery stores, restaurants, and other vendors.
The reluctance of many supermarket owners to get their stores involved often stems from liability fears. However, a number of laws actually protect companies from risk while offering tax write offs and legal paths through which deductions can be taken. The Bill Emerson Good Samaritan Act passed in 1996 is one such law protecting good faith food donors from civil and criminal liability.
Get all the details in our Food Donation Guide. We’ve pulled out the important points from the three major laws protecting and promoting grocery food donation and packed them into a clear and simple guide.
Logistical headaches can also dissuade supermarkets from donating food. Many stores don’t have the space to store leftover food while waiting for pickup. Others don’t know who or where they should donate food in the first place.
Feeding America offers a solution to these problems through its MealConnect program. It acts as a middleman between food vendors like grocery stores, produce markets, restaurants, and hotels and food providers like food pantries, soup kitchens, and shelters.
Through programs like MealConnect, supermarkets can participate in holiday food donation programs without saddling themselves with an expensive and complex logistics plan.
Eliminate overfilled displays and planogram divergence
As it turns out, the “pile em’ high, watch em’ fly” philosophy to product displays doesn’t seem to ring true as revealed in a study conducted by a 550-store grocery chain. Following a thorough analysis of freshness, shrink, and customer purchases in all of its perishables departments in 2008, Stop and Shop/Giant Landover saved an estimated $100 million a year by making a few key changes to protect its assets and prevent losses.
The company found that overfilled displays were directly causing products to spoil on the shelf, resulting in both financial waste and displeasure among customers while forcing staff to manually sort out damaged items. After simplifying their displays, customers didn’t notice fewer choices and less-full displays. In fact, customer satisfaction rose as produce was on average three days fresher than before.
This is just one example of display simplicity that can extend throughout the store. In the lead-up to seasonal products around the holidays, this is the perfect time to declutter displays and put the focus on high-interest products in preparation for the influx of shoppers.
Diverging from an established planogram can be a less-obvious issue feeding into a broader loss prevention problem. It’s not uncommon for supermarkets to quietly creep away from their plan without even realizing it. However, it’s important to remember that an effective planogram isn’t just a pretty blueprint for your store––it’s optimized to maximize sales in very subtle ways. Even a slight divergence can have a profound impact on your bottom line.
There are lower-tech and higher-tech methods of measuring planogram compliance. The former may be as simple as a store manager or employee walking around with a clipboard and verifying compliance. The latter entails taking pictures with a smartphone and comparing the current state of the store to the planograms themselves.
While both of these methods would suit small to mid-sized supermarket, larger grocers (whose financial pains are amplified with each small error) should consider investing in a system designed specifically to closely monitor planogram compliance. We’ve highlighted a few of these systems below.
RELEX Micro Space Planning and Planogram Optimization Solution
“RELEX’s micro space planning software enables supermarkets to create planograms for any fixture and continuously assess their performance while editing. Automated planogram updates and automatic creation of optimized planograms at all levels, including store-specific plans, maximize the benefits of micro space planning.”
Planorama Planocheck and PlanoManager
“Planorama’s Planocheck extracts real-time actionable unbiased business intelligence from a single shelf photo. Make your sales reps’ life easier with an instant report to act upon while they are still in the store. Centrally access up-to-the minute consolidated data for all your SKUs, stores, chains and channels to make better and faster decisions. And ensure shoppers’ in-store experience with your products is the one you have designed for them.”
“Cognitive Operational Systems, Inc. (COSY) is a spinout of UPenn’s GRASP Laboratory. The company focuses on leveraging University research for enabling industry solutions in computer vision, perception, and artificial intelligence. COSY became one of the early occupants of Pennovation Works in the summer of 2015.
COSY technology enables robots to navigate retail store floors, managing inventory, ensuring planogram and promotional compliance. COSY will also map stores including layout and architecture.”