Shelf Challenges

Five Key Challenges that Continue to Face CPG Companies Today

  • The number of authorized skus per store continues to increase, with limited store size expansion (especially in perishables and center-store)…
  • …resulting in reduced shelf space for existing items and insufficient space for new items.
  • Increased competitive activity (we continue to have record ‘new item’ launches).
  • Less in-store help, as retailers continue to cut manpower budgets, and…
  • …a reduced quality of store help (fewer Journeyman Retail Clerks, more lower cost ‘flex’ personnel), resulting in poor shelf practices such as “hiding out of stocks”, failure to order, etc.

The Results at the Shelf

  • “8 - 15% Of All Items Can Be Out-of-Stock on a Typical Day…”
  • “One out of every 7 out-of-stocks loses its shelf tag…creating product ‘voids’…”
  • “…the actual shelf seldom mirrors…headquarters plan-o-grams.”
  • “As companies move to cut costs, the condition of store shelves is deteriorating.”

…and the net result –

“CPG companies lose from $7 – $12 Billion in sales per year due to
out-of-stocks and product voids”!

Two conclusions from a major food industry study:

“Solving the shelf problem will require systematic solutions, not stop-gap measures…”

“Regular store audits, and the resulting feedback, can be a first line of defense…”