Why It Matters
Out-of-stocks are common and expensive. NielsenIQ estimated that United States (US) retailers lost about $82 billion in consumer goods sales in 2021 to products that weren’t on the shelf, about 7.4% of sales, with an average on-shelf availability rate of 92.6%.1 A worldwide study by Gruen, Corsten and Bharadwaj reported an average out-of-stock rate of around 8% worldwide, and estimated sales losses of up to about 4%.2 Shoppers don’t wait. The 2002 study found that, of shoppers facing an out-of-stock, about 31% bought the item at another store, 26% bought a different brand, 19% bought another size or variety of the same brand, 15% delayed the purchase, and 9% didn’t buy at all.3 For a manufacturer, the brand switches and lost purchases are sales gone, and the store switches cost your retail partner. Most out-of-stocks start in the store, not upstream. Corsten and Gruen trace them chiefly to store ordering and forecasting, and to shelf replenishment.4 Inventory records make it worse: DeHoratius and Raman found that 65% of about 370,000 inventory records across 37 stores of one retailer were inaccurate.5 When the system shows stock that isn’t on the shelf, automatic replenishment doesn’t reorder, and the gap stays until someone corrects the count.Best Practice
Keep a Must-Stock List per Store Type
Agree a core range for each store segment: the products every store of that type must carry. Audit it on every visit, product by product. A product that’s not on the list can’t be counted as missing, so keep each list current when products launch or are delisted.Check the Shelf, Then the Backroom
Walk the shelf first and note every gap, including partial gaps and product hidden behind other items. Then check the backroom before you call anything out of stock. NielsenIQ separates “out of stock” from “out of shelf” for a reason: stock in the building that isn’t on the shelf is a merchandising fix you can make now.1Treat Phantom Inventory as Its Own Problem
When the shelf and backroom are empty but the store’s system shows stock, the store won’t reorder on its own. Flag the product to the store manager and ask for a count correction, and place an order if you’re able to.Recover Before You Leave
For every gap, take one of these actions before you check out:- Fill it from backroom stock, and face up the product.
- Order it if there’s no stock in the store. See Orders, Stock Rotation, and Short-Dated Stock.
- Flag it to the store manager if it’s a count, delivery, or ranging problem you can’t fix.
- Log a follow-up for the next visit, so someone checks the fix landed.
Measure OSA the Same Way Every Time
Measure availability directly, against the must-stock list, not through service level or in-stock rates, which NielsenIQ notes don’t tell the whole story.1 Use one definition across the team:- OSA is the products found on the shelf divided by the products that should be there, as a percentage.
- Out-of-stock rate is 100% minus OSA.
How FieldKo Helps
FieldKo has no separate out-of-stock field. A product counts as out of stock when it’s in the store’s product set and the rep didn’t mark it present. Keep product sets current, or OSA drops when discontinued products stay in the set.
Common Pitfalls
- Trusting the system count. A store’s inventory record can show stock that isn’t there. Believe the shelf.
- Counting only empty slots. Partial gaps and hidden stock matter too.
- Different lists in different stores without a reason. Product sets that differ by store make OSA compare each store with its own range. That’s fine when it’s deliberate, and misleading when it’s not.
- No reason codes. Without a reason, the same gap comes back every visit.
See Also
- Run a Great Store Visit
- Orders, Stock Rotation, and Short-Dated Stock
- Measure What Matters
- Retail Execution Metrics
Sources
- NielsenIQ, “Empty Shelves in America: U.S. Retailers Lost Over $82 Billion in 2021,” 2022. Read the analysis
- Gruen, T.W., Corsten, D.S., and Bharadwaj, S., “Retail Out-of-Stocks: A Worldwide Examination of Extent, Causes and Consumer Responses,” Grocery Manufacturers of America, Food Marketing Institute (FMI), and CIES, The Food Business Forum, 2002. Out-of-stock rate as reported in Supermarket News, “Out-of-Stock Conditions Not Improving,” 2007 (read the article); sales loss as reported in Helm and Hegenbart, 2011 (read the paper).
- Gruen, Corsten, and Bharadwaj, 2002, as reproduced in Helm, R., and Hegenbart, T., “Customer Reactions to Real Out-of-Stocks,” University of Regensburg, 2011. Read the paper
- Corsten, D., and Gruen, T., “Desperately Seeking Shelf Availability,” International Journal of Retail and Distribution Management, 2003. Read the abstract
- DeHoratius, N., and Raman, A., “Inventory Record Inaccuracy: An Empirical Analysis,” Management Science, 2008. Read the article