'Store loyalty at stake as product shortage become rampant'

Shoppers are noticing increased levels of out-of-stock products, which is impacting store loyalty, states a recent report, as retailers continue to face supply chain disruption.

According to research by Retail Insight, a good majority (82 per cent) of UK consumers have experienced out-of-stock products in-store in the past 12 months while 60 per cent have experienced the same issue online.

Over a quarter (27 per cent) of consumers stated that they would question their loyalty to a grocer if out-of-stocks became a regular occurrence, and a further 21 per cent would abandon their shopping mission and leave the store without buying other items in their basket if they experienced a gap on shelf. Meanwhile, 27 per cent would switch their allegiance to a competitor supermarket.

While 71 per cent stated that product availability had become more of a problem since the pandemic, with three-quarters of shoppers (75 per cent) now experiencing more out-of-stocks since the start of the cost-of-living crisis. 60 per cent of customers reported that their favourite brands have been less available in-store across the last 12 months, while 45 per cent had noticed more items are missing from their online grocery orders.

In the wake of Covid-related disruption to supply chains, supermarkets have since come under pressure from climate challenges, political unrest and macroeconomic forces. From the ‘salad crop shortage’, which saw shelves stripped of fresh produce due to unseasonably cold weather, to soaring energy prices and avian flu hitting poultry farmers and prompting egg shortages, retailers have faced a myriad of supply chain challenges.

About 57 per cent of shoppers blamed poor product availability on the growing cost of food production, with a further 56 per cent pointing to inflation as the biggest factor impacting stock levels. Meanwhile, 43 per cent said the increased costs of logistics were liable for the problem of rising out-of-stocks, and a further 40 per cent blamed Brexit.

Paul Boyle, CEO of Retail Insight, commented, “Regardless of the causes – of which there are many and, rather unjustly, a great number of which remain outside of a retailer’s direct control – poor product availability doesn’t just impact customer experience at the shelf edge. It can cost retailers lost sales and, even more detrimentally, long-term loyalty.”

“While the figure varies from grocer to grocer and from category to category, the accuracy of availability of product on the shelf can vary significantly, with inventory records usually only 50-60 per cent accurate,” Boyle said.

“When items are unavailable, hidden or damaged, the resulting lost sales can be as much as 8 per cent of revenue – an opportunity retailers can ill-afford to leave on the table. By leveraging ‘live’ data, retailers can build a more accurate picture to ensure better product availability, putting the right product on the right shelf at the right time to keep their customers happy and encourage shopper loyalty.”