Empty shelves are becoming a major issue for one in four Australian supermarkets according to just released research by The Bailey Group

Stewart Bailey, CEO of The Bailey Group, says the ‘out of stock’ situation is the single biggest issue affecting the supermarket business today. 

“Unfortunately manufacturers cannot rely on retail staff to ensure the shelves are always full of their product. Some retailers are better than others, but there are too many supermarkets in Australia where staff levels are being cut back, products are falling through the cracks and businesses are suffering as a result.”

While the loss of a single sale is worrying for most manufacturers, the greater issue is when the customer switches to a competitor’s product after trialing it when their favourite brand wasn’t available.

“Australians are very parochial when it comes to the brands they are loyal to. If their favourite brand is regularly out of stock with one retailer, they will simply switch to the retailer that has a plentiful supply. It may only be one item in a shopping trolley of 100, but if it is integral to that person’s life, the supermarket will lose all profits and sales from these other 99 items as well,” says Bailey.

According to Bailey it is costing retailers worldwide in excess of $100 billion per year.

“Simply put, the customer who can’t buy what they want will be forced to either go without or trial a competitor product. The worst part is, the product may be available in the supermarket; it’s just out the back or high up in the capping above the shelves. With retailer margins being tighter than ever, staff simply cannot replenish supplies like they used to.

“A grocery-staple which is purchased often can equate to hundreds if not thousands of dollars in revenue over one customer’s lifetime. You can’t afford to throw that business away,” he says.