The store manager was probably rather less pleased as margins were clearly being painfully eroded. But if you are after bargains, then the supermarket fresh produce counter is definitely the place to look. With shoppers cutting back on higher-priced fruit and veg, sell-by date markdowns certainly seem to be on the increase – even if the stores are leaving it to the actual sell-by date before applying the discount. Fresh produce has always been a high-risk business, with expensive wastage if you get it wrong.
For most food stores, re-ordering is based on a mixture of gut feeling, the weather, upcoming events and historical sales patterns. Today it’s rather different, as historical sales patterns do not stretch back to the recessions of the early 1990s or 1970s, so how consumers will adapt their spending remains something of a mystery. The result – as the markdowns well demonstrate – is that stores are increasingly over-stocked with what some shoppers now see as ‘luxury’ items.
With consumers’ perceptions of ‘luxury’ changing by the day, getting it right is not easy. Demand forecasting has been helped in recent years by a raft of IT tools, from the likes of companies such as TXT-e-solutions, which can model likely sales within hours of a new product hitting the shelves. Widely used in fashion and consumer electricals, such tools have long helped retailers avoid over-stocking and ensure they can meet demand. They monitor sell-through rates in real time, match that to sales of comparable products, apply some complex number crunching and come up with likely demand.
In the current downturn, it should thus be possible to interpret new sales patterns quickly and effectively, avoiding backed-up fresh produce displays with today’s sell-bys at half price, while tomorrow’s are already stacked on the shelf.
Penelope Ody is a freelance journalist who has written about the retail sector for more than 30 years.