Each year, Americans throw out 133 billion pounds of food, wasting approximately 30 to 40 percent of the total food produced, according to USDA estimates. About 10 percent of this waste comes from grocery stores, where overstocking, premature sell-by dates, packaging damage and expectations of cosmetic perfection contribute to the problem.
Besides wasting food, this represents an enormous expense for grocery store owners. Inventory is already challenging since stores have to anticipate how much of each item will sell while still shelf-stable. Unexpectedly throwing food away further complicates things. So what’s the solution?
Here are some tips for better managing the rapidly changing environment of your grocery store.
1. Automate Your Inventory
One of the biggest steps you can take toward improving your inventory efficiency is to adopt an inventory software program. This lets you automatically update your stock, avoid manual data entry mistakes, improve accuracy, save time and keep you up-to-date in real time.
Ideally, your inventory management software should integrate with your other software programs. For instance, QuickBooks Point of Sale is designed to sync your point of sale transactions with your accounting, inventory solutions and customer relationship management (CRM) database.
2. Organize Stocked Items Efficiently
To get the most out of an automated inventory management solution, you need to deal with your physical inventory as well. Shelve your most frequently picked items in the most accessible locations and at an optimal height between the shoulders and hips.
Dedicate specific areas for your most popular items. Use bin shelving for fast-moving items and cartons or pallets for slower-moving items. Map out picking paths and sequence picking trips so your staff doesn’t have to go back and forth.
Eliminate waste by organizing your shelves to avoid dead inventory items. As new items move out of your storage area, place them at the back of your displays and move old items forward so they get bought first.
Create special sales areas for items that have passed sell-by dates but are still good. This encourages customers to buy these items at a discount and you still make money rather than throwing out good products.
Label items clearly so they don’t get double-counted or lost. Label by section, row, rack and shelf number for optimal efficiency. Use your own item numbers so you don’t have to change your labeling system if your supplier changes theirs.
3. Train Your Inventory Team
You also need to train your inventory team. Create procedures and train your staff to follow them. Make sure supervisors are trained as well so they can see that workers execute the process properly.
Provide extra training for employees who regularly handle stocking and cycle counting. You should emphasize how important inventory management is for your bottom line so your employees take it seriously.
4. Schedule Regular Check-Ins
Your inventory procedures should include scheduling routines to make sure inventory gets done. Schedule daily or weekly cycle counts for specific departments or areas so you don’t have to block out long periods for a full-store inventory.
Designate employees to handle cycle counts for particular parts of the store so they become familiar with the products and labeling. Use the time blocking feature of QuickBooks POS to avoid scheduling meetings or other activities during time frames dedicated to inventory.
You should also set time periods for you or your management team to periodically review inventory reports generated by your inventory management software. This will give you an opportunity to spot trends, such as which items are selling fastest, and make adjustments in your ordering. Monitoring your inventory enables you to make more accurate forecasts so you can keep up with customer demand.