By Jonathan Collins

Apr. 1, 2005—Over the past decade, retailers and their suppliers have spent hundreds of millions of dollars to reduce the number of times consumers can’t find the products they want on store shelves. They’ve invested in supply chain execution software and an alphabet soup of initiatives—CPFR (collaborative planning, forecasting and replenishment), ECR (efficient consumer response) and JMI (joint-managed inventory).

Despite these monumental efforts, the retail industry average for out-of-stocks remains a stubborn 8 percent globally. “For the top 100 retailers, that’s a $69 billion problem,” says Gerry Jastremski, director of retail availability at The Gillette Co.

What’s worse, the out-of-stock rate soars as high as 20 percent during special promotions, according to “Retail Out-of-Stocks: A Worldwide Examination of Extent, Causes and Consumer Responses,” a 2002 study commissioned by the Grocery Manufacturers of America (GMA). So while consumer product goods manufacturers and retailers spend the bulk of their advertising dollars on these promotions, consumers face a one in five chance of not finding the product when they get to the store.


“When faced with out-of-stocks, consumers delay their purchase, they brand swap or go to another store,” says Jastremski. “Whatever way you look at it, that’s bad news for the manufacturer and the retailer who see lost sales and a loss of consumer loyalty.”