When you sell food and other perishable products, you’re constantly running against the clock — and when the countdown reaches zero, you’re stuck with a total loss.
Effectively managing short-dated inventory is essential for small grocery store owners, especially as profit margins stay low and costs high. But while every grocery store constantly deals with short-dated inventory, some methods are more effective than others.
In this article, we’ll share expert advice to tackle short-dated inventory at your grocery store, so you can reduce food waste and boost sales.
Let’s get started.
First things first: What is short-dated inventory?
Put simply, short-dated inventory is any item approaching its expiration date. In some industries, a short-dated item is anything set to expire in 12 months or less. For grocery stores with thousands of perishable food items, what’s considered “short-dated” usually isn’t a universal rule, but dependent on the product category or department.
For example, shelf-stable items like canned soup or bags of chips might be considered short-dated if they’re expiring within three or four months. On the other hand, ground beef, which only sits out for a week or so total, might be considered short-dated if its sell-by date is within two or three days.
The majority of a grocery store’s inventory is short-dated by default. Any food item with an expiration date is short-dated — the fresher the food is, the faster it expires. So, why should a small grocery store with thousands of perishable items bother with creating a short-lived inventory strategy?
Think of it this way: The more consistent your strategy is for handling perishable inventory in different departments, the better you’ll be at controlling costs. This has huge benefits for small grocery stores, including:
Ultimately, a consistent strategy for your short-dated items helps you reduce operating costs and improve the shopping experience.
It’s hard to get a handle on your soon-to-expire inventory if you’re not tracking it.
While some stores still track inventory by hand or on a spreadsheet, this is error-prone and time-consuming — problems that only get worse the busier you get. When inventory is tracked manually, the only way to find short-dated items is to physically walk the floor and check labels.
To truly get a full 360-degree view of your inventory, we highly recommend adopting a digital inventory management system. This software is built into most modern grocery store point of sale (POS) systems and creates a digital list of all of your stock that you can check from anywhere.
Inventory management systems track information like:
Stock levels update whenever you receive an invoice or make a sale, giving you a real time view of your inventory at any given moment. This up-to-date inventory visibility is essential for tackling food waste and implementing a consistent short-dated inventory strategy.
If you haven’t taken a moment to look at your perishable inventory sales volume and shrinkage, now’s the time. Use the reports on your POS system to identify the departments or item types that are expiring without being sold and costing you the most money — these are the areas you should tackle first. Then, build it out into a storewide strategy.
Here are some methods you can use at your grocery store to turn those soon-to-expire items into sales.
While many of the tips on our list involve discounting items and running creative promotions to avoid throwing out expiring products, it’s always better not to discount them at all. The best way to do that is to train your staff on the first in, first out (FIFO) stocking method.
Put simply, the FIFO method ensures that the items you receive first are also the first to be shelved and sold. This means you’ll constantly move older items to the front of the shelf and sell them all before restocking with the newer stock in your storeroom.
This helps naturally clear out your soon-to-expire items since customers are more likely to pick what’s right in front of them. Train your staff in the FIFO process and to regularly rotate stock — this way, customers always see the freshest products.
One of the easiest ways to sell short-dated items is to discount them. This helps move products off your shelves before they go bad while appealing to bargain hunters.
Here are some tips for running successful short-term discounts:
Be consistent with how you label and run short-term discounts, so your customers learn when and where to look for the best deals. Remember: It’s always better to sell an item at a discount than to take a total loss.
With rising costs of living, tariffs, and inflation, many shoppers are more price-conscious than ever. Instead of making customers hunt for bargains, why not bring the bargains to them?
Set up a few dedicated areas in your store for seasonal or short-term deals. Here, you can put a collection of items, however random, for bargain hunters to sort through.
While we say random, we still recommend grouping these discount areas roughly by department or product type (like one area for snack deals and another for pantry staples or condiments). That said, save your endcaps and front-of-store displays for seasonal items and unique deals. You still want to encourage shoppers to browse your full-priced stock.
This strategy works best for shelf-stable goods, since items like dairy and eggs tend to expire so quickly that moving them to and from their normal spots would be a pain for staff.
A standard discount (e.g. 20% off) works great for selling items that need to go sooner rather than later. But if you have some time to spare (even a few weeks), why not try to upsell customers instead?
If you have an excess of short-dated inventory, set up buy one, get one (BOGO) offers that encourage customers to buy in bulk. You can also bundle short-dated items with other bestselling items.
Run a basket analysis on your POS reports to spot any product types that are usually bought together. This helps you come up with bundle ideas, for example:
As always, set up any discounts on your POS system in advance, so your cashiers don’t have to keep track of and enter discounts manually at checkout.
Related Read: Grocery Shopping Behavior: Using Customer Patterns To Increase Sales
Sometimes you might order too many items from a supplier, or demand dips for certain products unexpectedly, and you’re left with a big pile in your stockroom.
Even a good BOGO offer or discount might not be worth the labor costs of stocking all your excess items. In this case, take advantage of your online sales to sell this stock before it goes bad.
Using your POS system, you can set separate prices for items in store and online to set up online-only sales. This lets you stock a reasonable amount on your shelves and sell the excess via delivery and curbside pickup.
If all else fails and it looks like you won’t turn a profit from your short-dated inventory, don’t let it go to waste. Many grocery stores think that it’s illegal or impossible to donate expiring groceries, but you can.
It’s perfectly legal to donate perishable items, including eggs, milk, bread, and vegetables. While you won’t avoid a financial loss, donations are a fantastic way to build connections with your community and help those in need.
As the saying goes, “the best defense is a good offense.”
If you find yourself constantly having to run promotions and discounts to avoid losses from short-dated inventory, it might be a sign of other problems like overordering, improper demand forecasting, or premature spoilage from improper storage.
That’s why it’s essential to use the reports on your grocery POS system to identify trends early — this way, you can address them proactively.
Most of today’s POS systems have some form of inventory management, but many systems built for general retail don’t have the level of detail that a grocery store needs to avoid food waste.
IT Retail has over 30 years of experience working with small, family-owned grocery stores, international markets, and food markets. Our software is designed with grocery store owners in mind and packed with affordable, easy-to-use inventory tools to help you understand sales trends, spot spoilage, and reduce costs.
To learn more inventory tips, check out our free guide to grocery store inventory management, or schedule a custom demo of IT Retail today.