Personally, I'd prefer to see empty places where a product is sold out, than have to spend extra time coming to that conclusion by examining everything else nearby.
Yes! Especially in a place like Whole Foods, where I'm looking for particular products, and I'm not going to return if it's not apparent that WF stocks what I want.
That's exactly the reason for this policy. One of many reasons, actually.
But it actually is meant for things on regular shelves, it doesn't apply to the produce department, which is what all the pictures in this terrible article show. It also doesn't apply if the product is going to be out-of-stock for a known period of time. It's meant for situations where the buyer didn't order enough and it will only be out for a day or two.
I'd prefer they just put up a sign saying "sorry, we're out of bananas" and putting something else there in the interim. The employees are right: empty shelves look sloppy. Too many and the place even looks like it's going out of business.
I have never seen an empty shelf in any major brand store. The idea is insane. Especially for a store targeting an upmarket clientele with high prices.
It gives the store a scruffy, downmarket image. Also, it removes convenience. If I cannot get all the items on my list at a single store, then I will immediately stop going to that store...likely to never return.
Companies have been trying to reinvent the grocery store for decades now. What can be done has already been done, and now they are trying to alter the way their customers shop. Guess what! That doesn't work.
The headline hints--to this non-industry reader--at a dark ulterior motive, like perhaps driving customer behavior by suggesting scarcity. But I would welcome a policy that leaves the cilantro shelf space empty rather than fill it with parsley.
I think the writer is genuinely shocked as to how the leading luxury food retailer can have their grocery stores looking like Venezuela. They are just trying to make sense of it.
The answer seems to be that management is grossly incompetent and totally out of touch with reality which are pretty important facts for investors to be aware of.
Of course, there are a lot of people who would very much like Amazon to fail here, so that may have something to do with it to.
I was thinking more along the lines of a subconscious effect: "Hmm, an empty space at Whole Foods, that's a bit odd. Is a hurricane coming? Maybe I'd better get more canned goods/potatoes/coffee."
If you live by just-in-time-inventory, you will die by just-in-time-inventory.
It's one of those things that sounds good on paper, and can work, but it's damn hard to get right in real-life. The JIT model assumes you have the necessary data and models to predict when things need to be ordered, how long they'll take to be shipped out by the supplier, how long they'll take to arrive, etc. In reality, there are a LOT of variables that you can't (or at least "didn't") account for in your model.
It probably makes sense to start the system running with the parameters configured to allow a little more back stock in order to avoid outages, and slowly tweak it to get closer and closer to "pure" JIT. And even then, you need a way to account for abnormal circumstances like a snow-storm in Florida, or other "that just doesn't happen" scenarios.
Probably Whole Foods will eventually get their system tuned well enough to avoid the major problems, but it does take time to get it right.
That's not what this is about at all. It's about making sure things that are out are reordered and moving, and punishing stores that have historically made things look "presentable" by hiding the fact they are out of things and playing around with shelf space, thinking they know better than the people who set the shelves/corporate on what items actually sell. When you have people that monkey around with things like that, it defeats any work that analysts do to optimize ordering and sales.
That's not what this is about at all. It's about making sure things that are out are reordered and moving
Those things aren't an issue if you avoid outages to begin with. And while this specific link may have been referring more specifically to the re-facing issue, there is a broader story in play here, including another, different article about Whole Foods, which is more about their general ability to keep items in stock. I'm addressing the broader issue in my post above.
This policy, especially combined with a policy of keeping low backstock, is actually the best way to make sure you keep items on the shelf and moving.
It means that it's easy to find stuff in the back room if you are out on the shelf, it's easy to tae inventory and have accurate stock counts (and fix if you are off), and it's easy to make sure you don't end up with some idiot facing the aisles obscuring that you are out of stuff on the shelf when you have some in the back room (and reducing sales). Relatedly, it's a good way of making sure you order the right amount of things that sale and the right amount of things that don't sell.
It's how you should run a grocery store. Most grocery stores get in new grocery loads 3-4 times a week, so there's not a real need to keep a lot of backstock (especially if your shelf space is allocated properly).
If I am reading this correctly - the idea is to ensure both employees and customers are aware something is out of stock items. Previously, OOS shelves were filled with another "high" selling item.
This sounds like a great and useful idea. Instead of confusing customers with another "high" selling item, it is better to have the shelf empty.
Though I am unsure of the policy on "temporary OOS" tags - Why not have it there?
Kroger seems to follow the same playbook from what I can see. Locally, they are often sold out of common produce such as lettuce. Even dry and canned goods are a crap shot. The other night I was looking for canned white beans and the entire shelf section was empty. It's frustrating. They are basically the only grocery option in the area and they do enough business to carry a little extra inventory. As it is now, if I happen to be in an area with another option I'll shop there. This is costing them some amount of business.
It seems strange not to have a back stock of soda.. that stuff never spoils. Maybe it’s a space issue. Same with dry or canned goods. Produce should be cheap enough at wholesale to have some spoilage and they also have these seconds supermarkets that take not quite perfect fresh food and close to expiration date foods. I’d open another store selling those.
Ordering is basically based on velocity and grocery items usually come in 3 times a week. You can tell the manager though. Sometimes the issue is actually that they do have some backstock that hasn't come out, it widely varies from store to store. In fact, they are encouraged to have zero backstock for this exact reason, because the more you have that you haven't gone through, the more likely it is that your shelf count is off. In any case, if you wrote to Kroger they're likely to fix the issue.
Unfortunately, they tend to be a bit harsh in punishment for this sort of thing, it depends.
Central planning was dictating how much of every item to produce and where to distribute it and what price it would be sold for. For whole country for 5 years. This is exactly opposite of OTS.
(Beware of irksome Business Insider adblocker-blocking nag-box.)
As another reader has remarked, “the title hints at some ulterior dark motive” or somesuch, and implies that consumers should be alarmed and horrified by this change of practice. I fail to see how plugging a hole with something else actually makes any shopper’s life better: it doesn’t resolve the scarcity and it induces shoppers to buy things they didn’t intend.
So why the implied scandal?
(Note: I’ve been to Whole Foods perhaps five or ten times in the past decade, because I don’t live in the U.S.)
Readit News
But it actually is meant for things on regular shelves, it doesn't apply to the produce department, which is what all the pictures in this terrible article show. It also doesn't apply if the product is going to be out-of-stock for a known period of time. It's meant for situations where the buyer didn't order enough and it will only be out for a day or two.
Companies have been trying to reinvent the grocery store for decades now. What can be done has already been done, and now they are trying to alter the way their customers shop. Guess what! That doesn't work.
This experiment will end badly for WF.
Retail protip: don't be like Sears.
The answer seems to be that management is grossly incompetent and totally out of touch with reality which are pretty important facts for investors to be aware of.
Of course, there are a lot of people who would very much like Amazon to fail here, so that may have something to do with it to.
They did build the big, succefull business in a super-competitive market that is grocery. You cannot possibly achieve that if you are incompetent.
1. Maybe they have plenty of cilantro and instead leave 90% of the cilantro shelf empty. "oh wow it's almost gone, I'd better get some!"
2. They're actually out of cilantro and maybe it's better to have an empty shelf rather than fill it with something else.
It's one of those things that sounds good on paper, and can work, but it's damn hard to get right in real-life. The JIT model assumes you have the necessary data and models to predict when things need to be ordered, how long they'll take to be shipped out by the supplier, how long they'll take to arrive, etc. In reality, there are a LOT of variables that you can't (or at least "didn't") account for in your model.
It probably makes sense to start the system running with the parameters configured to allow a little more back stock in order to avoid outages, and slowly tweak it to get closer and closer to "pure" JIT. And even then, you need a way to account for abnormal circumstances like a snow-storm in Florida, or other "that just doesn't happen" scenarios.
Probably Whole Foods will eventually get their system tuned well enough to avoid the major problems, but it does take time to get it right.
Those things aren't an issue if you avoid outages to begin with. And while this specific link may have been referring more specifically to the re-facing issue, there is a broader story in play here, including another, different article about Whole Foods, which is more about their general ability to keep items in stock. I'm addressing the broader issue in my post above.
It means that it's easy to find stuff in the back room if you are out on the shelf, it's easy to tae inventory and have accurate stock counts (and fix if you are off), and it's easy to make sure you don't end up with some idiot facing the aisles obscuring that you are out of stuff on the shelf when you have some in the back room (and reducing sales). Relatedly, it's a good way of making sure you order the right amount of things that sale and the right amount of things that don't sell.
It's how you should run a grocery store. Most grocery stores get in new grocery loads 3-4 times a week, so there's not a real need to keep a lot of backstock (especially if your shelf space is allocated properly).
This sounds like a great and useful idea. Instead of confusing customers with another "high" selling item, it is better to have the shelf empty.
Though I am unsure of the policy on "temporary OOS" tags - Why not have it there?
Unfortunately, they tend to be a bit harsh in punishment for this sort of thing, it depends.
ref: https://en.wikipedia.org/wiki/Gosplan
As another reader has remarked, “the title hints at some ulterior dark motive” or somesuch, and implies that consumers should be alarmed and horrified by this change of practice. I fail to see how plugging a hole with something else actually makes any shopper’s life better: it doesn’t resolve the scarcity and it induces shoppers to buy things they didn’t intend.
So why the implied scandal?
(Note: I’ve been to Whole Foods perhaps five or ten times in the past decade, because I don’t live in the U.S.)