Logistics and Supply Chain Management, 6th Edition

The impact of out-of-stock

One study3 identified that a significant cost penalty is incurred by both manufacturers and retailers when a stock-out occurs on the shelf. The research found that on a typical day a shopper in the average supermarket will face stock-outs on 8 per cent of items in the categories studied. The reaction of customers when faced with a stock-out was highlighted by the same study. Over one-quarter of shoppers bought a different brand and 31 per cent said they would shop elsewhere for that product. This represents bad news for both the manufacturer and the retailer. Even worse, other research4 has suggested that over two-thirds of shopping decisions are made at the point of purchase, i.e. the purchase is triggered by seeing ...