Running a grocery store can feel a lot like managing a dozen spinning plates at once. You want to offer your customers the best and most varied product options, but you don’t want to waste cash on stock you don’t need — or run out of those top-selling items and lose out on sales.
Talk about a headache!
If you're a small grocery store owner, you know firsthand how challenging it can be to keep track of inventory. That's why we've put together this post to guide you through the process of managing your inventory like a pro.
How do grocery stores keep track of inventory? You’re about to become an expert. From tracking stock levels and placing orders to minimizing waste and optimizing profits, we'll cover everything you need to know to keep your store running smoothly.
How Do Grocery Stores Keep Track of Inventory? Why Inventory Matters
Inventory management is critical for any store, but this holds doubly true for grocery store owners. Without accurate tracking of your stock levels, you risk running out of popular products, overstocking items that don't sell, and losing money due to spoilage or expiration.
Related Read: Grocery Store Inventory 101: The What, Why and How for Inventory Success
Unlike other types of retail stores, grocery stores have to contend with items with a limited shelf life and that spoil quickly. If you aren’t careful about tracking expiration dates and rotating stock, you will have a hard time ensuring you have fresh products to sell to your customers.
You also need to consider things like the storage requirements and temperature needs of your products as well as seasonality. Without the right tools and processes, you’ll have quite a headache on your hands.
What happens if you don’t manage to juggle all these elements successfully? Simple: lost profit and revenue. You’ll lose sales if you continually run out of stock of the items your customers need. You’ll also waste valuable capital if you overstock items that don’t sell as quickly — especially if those items are perishable. You also risk losing revenue to shrinkage due to theft.
On the other hand, by implementing a solid inventory management system, you can enjoy a range of benefits for your grocery store. You can reduce waste by not overstocking items that spoil, and you’ll increase sales and improve customer satisfaction if you always have popular items in stock. In short, we can’t overstate the importance of inventory management – it's a key element of success for any small grocery store.
Tools for Grocery Inventory Management:
Point of Sale System
The first tool you should invest in for your grocery store is a point of sale (POS) system. A robust POS system can help you track sales and inventory levels in real time. This data gives you invaluable insight into what products are selling, how quickly they’re selling, and what needs to be restocked.
Your POS solution can also generate custom reports to help you make informed decisions for your store. You can manage your inventory with ease, taking steps to reorder products that are running low before you run out so you never miss a sale.
Consider a solution like IT Retail to enjoy advanced features like customer membership options, customizable label printing, cashier management features, and more. Our solution is easy to use, with an intuitive interface that allows for lightning-fast onboarding.
Barcode Scanner
A barcode scanner is a must-have tool for any grocery store owner.
Your barcode scanner makes the checkout process efficient and helps reduce errors during checkout. You can also use your barcode scanner to aid in your inventory management efforts. Scanning products as they are received or sold enables you to track inventory levels in real time and make informed decisions about restocking.
Related Read: 3 Ways Self-Checkout Saves Grocers Money
For the best results, you’ll want to integrate your barcode scanner with a robust POS system like IT Retail.
Inventory Management Software
Inventory management is critical for grocery stores.
If you want to streamline operations, improve efficiency, and increase your profits, you’ll need to invest in inventory management software. Implementing inventory management software in your store will help you save time and reduce errors, allowing you to focus on providing excellent customer service and growing your business.
Some of the features you should consider for your inventory management software include:
- Purchase orders that allow you to manage your purchases from vendors in one interface.
- Inventory count, giving you the data you need to keep a finger on the pulse of your inventory levels.
- Mobile back office management so you can manage your business from the floor or from home in a pinch.
- Low stock reports so you never run out of a best seller and miss out on a sale.
- 24/7 emergency tech support in case of an outage or another technical challenge during off-hours.
Ideally your inventory management software is baked into your point of sale solution.
Tips for Inventory Management:
Conduct Regular Counts
If you want to prevent stockouts and overstock, you need to have a strong handle on your inventory levels at all times. You can use various methods to conduct inventory counts, including manual counting or a barcode scanner.
How frequently should you conduct these counts? It depends heavily on your grocery store’s size, sales volume, and the types of products you’re selling. Ideally, you’ll invest in a POS solution that tracks your inventory levels in real time, allowing you to identify discrepancies and make adjustments quickly and easily.
Track Expiration Dates
As a grocery store or market owner, it’s essential to track expiration dates on your products. Selling expired products can pose a health risk to customers and damage your store’s reputation — if not risk your licensure with the Health Department.
You need to track expiration dates in your POS system to prevent waste and ensure your customers’ safety.
One method that can assist in your efforts to move stock from your shelves before it expires is to implement a first in, first out (FIFO) inventory management system. In this system, older products are shelved and sold before newer ones, helping to ensure the old stock sells before it expires.
Make Data-Driven Ordering Decisions
Regarding inventory for your grocery store, you can’t just trust your gut. You should optimize your inventory process using data-driven decision-making.
Maximize your profits by establishing reorder points and lead times. These steps will help to ensure you never run out of popular products. Make decisions about when to reorder and how much to stock using sales data.
Your sales data can also help you identify which products aren’t selling well. These products are good candidates to discount and even remove from your reordering process.
How can you access this data? Simple: use the reporting features of your POS solution! By leveraging your POS sales data, you can make strategic ordering decisions that help you improve your store's bottom line.
How Do Grocery Stores Keep Track of Inventory?
If you’re still tracking your inventory by hand, let this be your sign that it’s time to make a change.
Tracking inventory is crucial for any business, but with the wide variety of products and perishable items lining your shelves, inventory management is extra vital and challenging for businesses like yours.
If you want to easily track inventory, implement a robust point of sale system like IT Retail. Our solution offers all the features you need, including customizable purchase orders, shrinkage control measures, stock reporting, and more.
To see if IT Retail is the right solution for your business, check out our free demo today!