A 3-year study involving seven of Europe's largest retailers uncovered a significant issue with inventory record inaccuracies (IRI). The study found that around 60% of the SKUs analyzed had positive and negative discrepancies, adversely affecting sales. Correcting these inaccuracies led to a 4-8% sales increase.
It also revealed that negative discrepancies—more common in the grocery and general merchandise sectors—were often due to spoilage, theft, or damage. Over time, inventory accuracy deteriorated sectors' stock counts. After correcting inaccuracies, high discrepancy SKUs saw a sales lift of over 14%, medium discrepancies improved by 7%, and low discrepancies increased by 2.11%.
To address these issues, negative discrepancies efforts should focus on reducing shrinkage through better security and tracking.
Streamlining backroom operations and improving the accuracy of return recordings are essential for positive discrepancies. Moreover, stocktakes should be considered necessary for compliance and strategic opportunities for sales growth. Timing them before high sales seasons and balancing their costs with potential sales increases can make a substantial difference.
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