Managing perishable produce inventory is like juggling a dozen ticking time bombs, with every item ticking down to explode at a different time. So, it’s easy to see why managing fruit and vegetable inventory at grocery stores can get complex and stressful.
Customers love fresh produce – and mastering produce inventory management is key to reducing food waste, increasing profits, and meeting customer demand.
In this article, we’ll cover why produce inventory management is so important for grocery stores and share tips on how you can optimize your inventory process.
Why Produce Inventory Management Is Key for Small Grocery Stores
Nothing is quite so deflating for a customer than walking into a produce section full of sad-looking lettuce and rotten bananas. But managing highly perishable inventory like produce isn’t easy, especially if groceries aren’t using the latest tools and processes to help.
A fresh selection of fruits and vegetables in a local grocery can be a big draw for customers – but providing freshness requires a solid produce inventory management process.
Following produce inventory management best practices helps grocers:
- Sell the freshest items: The goal of effective inventory management is to keep items moving and to stock the right amounts at any given time. However, the short shelf-life of fresh produce makes careful monitoring and quick turnover essential.
- Reduce spoilage: Produce is more susceptible to spoilage due to temperature fluctuations, improper handling, and exposure to air. Without an effective inventory management process you risk losing products.
- Meet seasonal and fluctuating demand: Demand for produce fluctuates wildly based on what’s in season, holidays, and other factors. Knowing what items will be in demand and what to stock less of is important to satisfy customers and prevent waste.
- Maintain quality control and food safety: Stocking quality produce is just one piece of the produce inventory puzzle. Grocers also need consistent processes for how they handle, store, and rotate stock to ensure produce is fresh and meets regulatory requirements.
With a consistent and modern inventory management process for your produce, you can turn curious visitors into regular shoppers while increasing profits.
Related Read: Yes, You Can Donate Perishable Groceries!
5 Methods To Optimize Your Produce Inventory Management
Want to offer fresh produce? Then it has to be fresh. But that means managing hundreds of items that get a little closer to spoiling the moment they arrive.
Sound stressful? Don’t worry – by combining the right tools and techniques, even small grocery stores can offer fresh produce without stress.
Here are four surefire ways to optimize produce inventory management at your grocery store.
1. Track Inventory in Real Time
If you lose track of items, you’ll either have to sell them at a discount or take a complete loss if they expire. To combat this, you need an accurate, real-time view of inventory.
This is one area that technology can help – especially for small and medium-sized businesses.
Inventory management software gives you efficient ways to:
- Regularly audit stock levels
- Receive against orders or on the fly
- Make inventory edits from a mobile device
- Manage returns of expired or damaged products
With these features, you can better manage your stock by knowing exactly how long items have been in your store. An accurate view also helps you spot problems (and their root causes) a lot faster.
Related Read: How do Grocery Stores Keep Track of Inventory? 6 Tools & Tips
When inventory management is natively integrated with your point of sale (POS) system, tracking your stock is even easier. Whenever items are scanned at checkout, your inventory will be updated immediately, so you’ll know exactly what’s left over.
Modern systems also let you set up reorder limits to generate purchase orders when item inventory falls below a certain threshold. This ensures that any perishable inventory isn’t ordered too early and popular produce items stay in stock.
2. Use Data for Demand Forecasting
Every grocery store owner wishes they had a crystal ball to predict their customers’ desires. While not quite at the same level as magic, reports and data can help grocers confidently plan for the future and reduce food waste through demand forecasting.
At its core, demand forecasting is analyzing historical sales and inventory data against external factors like time of day, season, holidays, promotions, and more to discover customer preferences and behaviors. Discovering various correlations ultimately helps you anticipate customer preferences, optimize stock levels, and maximize profits.
Some examples:
- If you find that certain items sell out on weekends during football season, make sure stock levels are replenished in time.
- You could discover that sales of certain fruits and vegetables dip considerably during the holiday season – so you know not to overstock those items at that time of year.
- You might find that people are much more likely to shop for certain items later in the day – so you know not to put out the majority of those items in the morning.
Demand forecasting isn’t perfect and is best used for mid to long-term planning. Sometimes you’ll have to use your gut for short-term surges in demand. But it’s still a great tool to optimize your overall produce inventory management.
Top grocery store POS systems come with built-in reporting that lets you monitor sales data in real time so you can quickly pick up trends and make adjustments as needed.
3. Implement the First In, First Out (FIFO) Method
Unlike packaged items, selling produce is time sensitive. This is why many grocers use what’s called the first in, first out method to manage produce.
The FIFO method refers to a retail method where the items you acquire first are the first ones you put out to sell. In other words, when you receive a new shipment of produce, you should always put the oldest items on top so they go out first.
Related Read: Small Grocery Store Layout: 6 Ways To Drive Revenue
This ensures that the new arrivals aren’t being sold in the produce section while older stock is spoiling in the back. The FIFO method is widely considered a best practice for managing perishable inventory since it keeps products fresh and reduces waste.
Additionally, because produce spoils at different dates, regardless of when it arrived, it’s important to put out newer products toward the back of the shelf. Even when you’re not stocking the shelves, monitor the produce that’s actively being sold and rearrange the shelf as needed.
Grocery store POS systems like IT Retail are built to support FIFO inventory management by automatically tracking the movement of goods based on their arrival dates. This ensures that you can monitor when foods arrive and discount if needed to move inventory quickly before it spoils.
Like demand forecasting, this information can also be useful when considering which produce to feature front and center in your store layout.
4. Leverage Discounts and Promotions to Move Produce Stock
Inevitably, even with the best planning, you may be left with too many of one item or others that just aren’t selling. When this happens, you can use rewards and discounts built into your POS system to encourage customers to buy those products.
Beyond discounting overstocked items, you can also create custom product bundles. Say you have some bananas that are just starting to go brown. Bundle them with the ingredients for banana bread to make a perfect banana bread set while supplies last.
Using discounts strategically is a great way to keep inventory moving when your inventory strategy doesn’t work out exactly as planned.
5. Know Your Suppliers and Order at the Right Time
For any small grocer, it’s vital to build strong relationships with your suppliers to ensure you’re getting quality products and timely delivery. Every supplier ships and responds to orders at different speeds, so understanding how fast or slow your suppliers are is another step in optimizing your produce inventory management.
Once you have an understanding of how each supplier operates, you can set automatic order thresholds that will notify you when you need to make new orders to ensure produce is delivered on time. Grocery store POS systems also streamline reordering, cutting down on manual errors so you can optimize your stock levels.
Ready to Reduce Spoilage and Master Produce Inventory?
Once you have full control of your produce inventory, maintaining a fresh, appealing produce section is a breeze. That’s why small grocers need to pick technology that’s built for smaller grocery stores.
IT Retail was built by a third-generation retailer to address the unique needs of grocery stores and food markets. With a user-friendly layout and advanced inventory management options, IT Retail helps small and mid-sized grocers reduce spoilage, meet customer demand, and improve profit margins.
To find out how IT Retail can help optimize your produce inventory management, schedule a demo today.
