Ongoing supply chain disruption, delays at the border and inflationary pressures on food producers are among the issues UK shoppers blame for rising instances of out-of-stocks on supermarket shelves, according to research by Pricer, an in-store automation and communication solutions provider.
UK shoppers polled by Pricer showed that consumers typically now find almost a fifth (18%) of the items in their weekly food shop unavailable on-shelf when they shop in-store, rising 1 percentage point year-on-year. Instances of out-of-stocks were higher when buying groceries online, with over a quarter (28%) reporting food shop items were out-of-stock, prompting them to be missing or substituted in their orders, a rise of 6% year-on-year.
Brexit was the top reason UK shoppers believed was contributing to the shelf gaps they were experiencing in-store, with 40% of respondents citing complications with border checks and additional paperwork making it harder to import food goods into the UK. While the UK government announced it would delay planned post-Brexit checks on fruit and veg for a third time earlier this month, 52% of UK consumers believe more products are unavailable due to the UK’s decision to leave the EU. Meanwhile, despite only a small proportion of UK food trade relying on Red Sea routes, 39% of UK shoppers felt that the supply chain disruption from the Red Sea Crisis had led to more stock being missing from shelves in-store.
Over a third (38%) of UK consumers blamed increased shelf gaps on inflationary pressures on food suppliers’ production and manufacturing, impacting their ability to meet demand, and a further 37% felt rising out-of-stocks were due to food producers going out of business because of rising cost pressures. In the first half of last year, advisory firm, Kroll, reported that the number of UK food and drink businesses falling into administration had increased by 5.6% compared to the year prior, with cost and wage inflation, supply chain issues and labour challenges all contributing to this increase.
And, at the same time as grocery retailers are facing multifaceted supply chain challenges, consumer expectations around product availability are rising. Now, 74% of customers expect products to be available when they go into store, an increase of 5 percentage points year-on-year. And while 67% would make do with an alternative if an item was out-of-stock, 43% would abandon their entire basket.
Peter Ward, UK country manager at Pricer, commented: “Our research shows a direct correlation between on-shelf availability (OSA) and customer loyalty, with 72% of shoppers more likely to shop with grocers who have good product availability.
“We know out-of-stocks cause losses in so many areas – lost sales, lower customer satisfaction, reduced market share – as well as higher labour costs resulting from trying to fix poor OSA with outdated systems and processes. By fostering collaboration among retail managers, staff, and technology companies, supermarkets can significantly improve their inventory management and customer service.”
NAM Implications:
- Given the cost and effort required to get consumers into the aisle…
- …only to be confronted with on-shelf gaps.
- Leading edge retailers will be forgiven for refusing to stock goods that cannot guarantee on-shelf availability…
- …with penalties to match?
