5 shelf planning and management tips for working with fresh foods

Fresh foods are tricky to work with in terms of shelving and inventory management. Here's how to make sure you’re avoiding waste while managing fresh foods

Grocery retailers typically have to deal with very thin margins and increasingly complex supply chains. When it comes to fresh inventory, these challenges are even greater. For example, in the US, around a third of all food produced ends up going to waste, thus resulting in a serious environmental and economic impact. To live up to their social responsibility, business goals, and customer demands, retailers must think carefully about shelf-planning and management, especially when handling fresh foods.

Here are five tips to optimise fresh food inventory management:

#1. Account for inventory shrink

A lot of fresh produce, such as fruits, vegetables, and meat, is sold by weight, rather than by unit. Because of this, retailers must always account for any inventory shrink that might occur. While inventory shrink shouldn’t be an issue for non-perishable goods or those with a long shelf-life, it’s a serious problem with certain fresh products. For example, some fruits and vegetables lose weight as they ripen or approach spoilage, while others lose weight when shoppers remove things like inedible leaves and stems they don’t want to pay for.

While you can’t completely eliminate inventory shrink, accounting for it will help you place your orders with reduced risk of wastage and understock.

#2. Prepare for extreme variability

Fresh goods, especially those that are sourced locally, are in high demand now that shoppers care more about sustainability than ever before. However, selling locally sourced fresh goods in a traditional retail environment presents major challenges, such as the extreme variability of harvest times. As such, retailers must account for some flexibility when it comes to harvests – after all, they don’t tend to take place on specific dates, and every harvest has a different yield when it comes to quantity and quality

Retailers must have a system in place that allows for some flexibility, especially when it comes to managing short-term replenishment. They must do all they can to ensure availability while keeping waste to a minimum.

#3. Manage complexity of variants

Fresh produce often experiences large shifts in demand based on availability from suppliers, the needs of customers, and product quality. Both fresh products and supply chains are often highly variable. On top of that, few supermarkets only keep a single variant of a particular fresh product type. Apples, for example, might have more than half a dozen variants in one store.

To overcome these challenges, retailers need to take a data-driven approach that can cater to the complexities of managing multiple product variants. This might, for example, involve aggregating product codes for every type of apple for the purposes of demand forecasting, rather than managing each one separately.

#4. Monitor supply chains closely

Selling fresh produce comes with an inherent and high degree of uncertainty. However, this uncertainty can be offset significantly by keeping a close eye over your supply chains. To keep visibility over the supply chain, you should consider integrating things like transportation and warehouse management systems into your infrastructure. Retail management software can also help you keep a close eye on stock levels in real-time, and ensure your planogram aligns with the reality of your store shelves.

While your suppliers might be responsible for things like transportation, it’s important to keep close relations with them and monitor their performance regularly with data-driven insights. This will help you ensure compliance with food standards directives, as well as live up to the expectations of your customers.

#5. Leverage machine learning

In the world of online retail, every customer interaction generates actionable data. With the advent of smart store shelves equipped with RFID technology, that’s now possible in traditional retail too. However, the sheer amount of data collected through such activities has become virtually impossible to make sense of through manual means. Machine-learning is the one true answer to this problem, since it allows you to make sense of big data.

Machine-learning is an excellent tool for fresh food inventory management. It can help with demand forecasting, fresh food inventory shelf plan optimization, and much more. This also frees up time for your team by automating many routine auditing and other operations.

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