Many Retailers Lose Sales from More Than 20 Percent of Consumers Due to Out-of-Stocks

As if retailers did not have enough issues attracting consumers in a weak economic environment, retailers are losing sales of at least one item on every visit to 20 percent of consumers coming into their stores according to a new research study from IHL Group.

Consumer Electronics stores are losing the most, with consumers saying that they leave the store without buying at least one item 21.2% of the time. Or put another way, these retailers are losing $1.35 in sales for every customer that comes into their stores due to their level of out-of-stocks. Likewise Warehouse Clubs lose $1.78 and Grocery stores $.68 in sales for every one of their customers when they can't buy that product or an adequate substitute.

"Retailers remain in denial when it comes to consumer's perceptions of out-of-stocks," says Greg Buzek, president of IHL Group, an analyst firm and consultancy that serves retailers and technology vendors. "The consumer doesn't care why the product is not available. They come in with money to spend at the stores and have to leave because the shelves are either empty, there is no one to help get a locked item, or the staff simply cannot find the merchandise even though the computer system says they have it. Nine percent (9%) of all consumers in our study have simply stopped shopping one or more retailers in the last 12 months due to the problem."

The study, entitled "What's the Deal with Out-of-Stocks?" looks at why retailers lose sales to consumers who want to spend money at their stores but leave without purchasing for reasons other than price. It reviews the performance in the minds of consumers of retailers such as Wal-Mart, Kroger, Best Buy, Circuit City, Costco, Albertson's, The Home Depot, Lowe's and many others that sell products in food/grocery, home improvement, or electronics categories.

Some key findings of the study include:

- Among Grocers, best in-stock performance is Safeway (14.7% of consumers experiencing out-of-stock of at least one item), worst are Food Lion and A&P (22.8%).

- For Home Improvement, the best performer is Ace Hardware (13.6%) which was slightly better than Lowe's (14.1%). Worst performer in the category according to consumers is Menard's with 20.5% of their customers experiencing an out-of-stock of at least one item.

- For Consumer Electronics, Fry's Electronics has the best in-stock position (13.1% of consumers experiencing out-of-stocks). OfficeMax is more than double this at 30.6% or almost 1 in 3 customers leaving without at least one item.

- Nearly 1 in 10 consumers of Sears/Kmart has stopped shopping their stores in the last year due to poor in-stock performance.

- Grocery customers leave stores not purchasing at least one item they planned to buy or a substitute product 16.6% of the time.

- Consumers aged 26-35 years of age experience out-of-stocks 11% more often than other age groups.
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