‘Erratic’ buyers are on increasingly thin ice over forecasting

If there’s one thing grocers and suppliers can agree on, it’s the importance of availability. You cannot sell fresh air, as Ken Morrison used to say. So it’s worrying that as we report, the latest Groceries Code Adjudicator survey noted growing concerns from suppliers over retailer forecasting data.

At 17%, the significant costs incurred by suppliers through inaccurate forecasting is now joint first (along with invoice discrepancy resolution procedures) among issues experienced. As a result, 9% highlighted a lack of compensation for forecasting errors and forecasts prepared without due care. And the survey paints a picture of increasingly “erratic” retailer behaviour characterised not just by short termism and uncommunicated range reviews, but inconsistent ordering patterns combined with obtuse instructions from constantly updated retailer portals, and computer-generated forecasts that are “often unreliable, unclear, and unusable”.

This is a recipe for disaster. And what’s all the more surprising is that it’s happening in the age of artificial intelligence, which is supposed to be transforming big data analysis. But it’s not. Or not as much as it should be.

One obvious reason is the commercialisation of this forecasting data as a revenue stream. Which seems short-sighted in the extreme. Another is the rise of the so-called ‘desktop buyer’: with buying teams pruned, the reliance on AI and portals speaks to the fact that buyers and suppliers aren’t talking to each other, let alone meeting regularly.

The report does not single out any particular retailer as the results are masked with anonymity. But looking at the ‘change in retailer practice over the past 12 months’, it’s not difficult to surmise who the Adjudicator’s report is referring to.

Under the circumstances, it’s tempting for buyers to pass the buck: all too often the onus is on the supplier to deal with unsold stock, or supply stock at a moment’s notice. And the report suggests supermarkets ‘often appear unwilling to accept responsibility for forecasting issues’.

But buyers are on increasingly thin ice. For while Aldi this week settled out-of-court in the High Court case brought by one of its brassica suppliers, the decision to allow evidence from the Groceries Code Adjudicator has created a precedent for future cases – and even backdated ones.