Running a new inventory-based business, such as a supermarket, is difficult for many reasons. But one of the largest obstacles store operators face is managing perishable stock because of the constant risk of shrinkage caused by spoilage and the strain of just-in-time inventory management.
It is difficult to handle the inventory of perishable items, mainly because when a wrong buying decision is made, or sales decline due to any production or supply chain issue, costs and waste can rise quickly. In addition, shoppers are becoming more focused on freshness and quality, and the demand to maintain just-in-time stock is steadily rising.
One effective approach to reduce spoilage and improve profits is to gain a better understanding of consumer demand for consumer goods. By applying tools, methods, and proven practices for modern fresh inventory management across the value chain, retailers can improve profitability and reduce waste, while also lowering carbon emissions.
Why is Demand Forecasting for Consumer Goods Difficult?
Stock management is extremely important for supermarkets and grocers to control costs, increase revenue, and supply what customers want, where and when they want it.
Demand forecasting for consumer goods can be a major factor in effective inventory management. It is the process of predicting future customer demand over a defined time period, at a specific price point, within a certain market region. However, retailers face several challenges in reaching forecast accuracy and operational efficiency in fresh inventory management. Some of them include,
- Spoilage caused by poor storage conditions or improper handling
- Excess inventory resulting from over-ordering or weak stock oversight
- Insufficient staff training on correct rotation and handling practices
- No markdown plans for products approaching expiry
- Damage during transportation or storage
- Theft by shoppers or employees
- Incorrect stock counts or data entry errors
In addition, for fresh retail, distribution centers are just as critical as retail outlets. They play a key role in selecting and packing online orders at locations closest to the customer to ensure the quickest delivery. This means grocers must anticipate demand and maintain stock both in warehouses and on store shelves to serve walk-in customers as well as those placing orders for delivery or pickup. This adds further complexity to demand forecasting for consumer goods.
Top 5 Best Practices of Efficient Fresh Inventory Management
Using demand forecasting for consumer goods can assist retailers to some degree in lowering spoilage. However, they must depend on a combination of technology and multiple best practices to ensure adequate stock levels. The best practices that support efficient fresh inventory management include:
- Studying Daily-level Numbers
Store operators, by reviewing weekly totals, help manage supplies of many products, particularly packaged essentials and items with longer shelf life. Examining daily figures is critical for perishable goods. For example, knowing a store sells 25 pounds of roast beef in a week matters less than knowing it sells 20 pounds on Fridays and double that amount before certain holidays. Stores that overlook this level of detail often lose sales due to empty shelves, or worse, face heavy waste from excess stock. Demand forecasting solutions for consumer goods can help identify these demand patterns and support efficient inventory management.
- Considering “Ambient” Stocks
Grocers often concentrate on handling fresh or short-shelf-life products, but they must also manage goods that remain stable at room temperature. For these items, inventory control should ensure shelves appear full, not just stocked until the next delivery arrives. A well-filled shelf signals to shoppers that the store is well managed and also reduces how frequently staff need to restock. Stores improve efficiency by using demand forecasting for consumer goods. It helps schedule deliveries and restocking, supports workforce planning, and prevents employees from obstructing shoppers.
- Tracking Item-level Expiry Dates
Stores usually place older fresh products at the front, yet shoppers often reach toward the back for newer packages. Fresh inventory management helps grocers identify items nearing expiration and develop strategies to minimize losses. These approaches may include weekly promotional offers or repurposing older but safe items into faster-selling products like salads or ready-to-eat meals.
- Adopting Unique Methods for Ultra-fresh Products
Highly fresh items, such as store-prepared salads, sandwiches, seafood, or ground meats, often differentiate a store from competitors. Yet they require tighter oversight. Running out drives customers away, while carrying excess results in significant daily waste. That is why retailers must closely monitor which products peak on specific days. These trends vary widely by location. Demand forecasting for consumer goods can help identify these trends.
- Account for Seasons and Sudden Demand Shifts
Effective fresh inventory management also requires preparation for sudden surges, such as those triggered by a celebrity mention, which requires holding reserve stock. Seasonal shifts are easier to anticipate. Customers seek more salads and cold beverages in summer, while winter drives higher demand for soups and hearty meals. With demand forecasting for consumer goods, businesses can plan for these seasonal patterns, maintain optimal inventory levels, and reduce spoilage.
Bottom Line
Managing perishables is one of the most challenging aspects of operating a fresh-product business, but with the right systems and practices, companies can reduce losses and improve margins. A combination of traditional statistical techniques, machine learning, and adaptive demand forecasting for consumer goods represents the most effective path to efficient fresh inventory management.
Looking ahead, applying AI to support sustainability will become increasingly common, establishing a new standard for the fresh retail industry. The broad impact of these tools offers a glimpse into a future where supermarkets not only succeed financially but also serve as pillars of sustainability within their communities. By relying on informed decisions and AI-powered tools, fresh retailers can guide the industry toward a more sustainable, low-waste future.
