The challenges Sainsbury’s faces as outlined by Alan Mitchell (MW October 28) misses a crucial problem that both multiples and packaged goods brand owners must tackle.
Sainsbury’s itself has identified that a major contributing factor to its poor performance is “out of stockÃ¢â¬Å¡ shelf space” – the latest Grocer Survey gives it a 96.5 per cent efficiency rating. Safeway performs even worse with 5.2 per cent of its shelf space empty at all times
And empty shelves are just part of the problem. Out-of-date stock or promotions, incorrect pricing and ordering the wrong products are a few of the other symptoms connected to the same basic problem.
Sainsbury’s believes it can tackle the problem by introducing new stocking systems and motivating staff. This may work, but it is not a risk packaged goods brand owners should be prepared to take. They can take ownership of the problem and provide the solution by introducing field auditing that identifies and corrects out-of-stock and presentation inadequacies.
Out-of-stock problems occur in all retail outlets and it costs brand owners crucial sales – at least five per cent a year. The irony is that it is much cheaper and easier to win business by solving this problem than spending seven-figure sums enticing new customers to buy brands that are then often unavailable.
The Blue Water Agency