Supervalu Tests Item-Level Tools to Battle Out-of-Stocks

Supervalu is testing new "weapons" in the long-running battle against out-of-stocks, piloting tools that track shelf in-stock positions by item and time of day. The retailer is also boosting store-level control over crucial end cap merchandising displays as well as overall product assortments.

The out-of-stock tools being tested "analyze point-of-sale transaction data to identify out-of-stock opportunities, which allows our store director to take prompt, corrective action," said Supervalu CEO Craig Herkert. "These actions include training associates on how to better prepare orders, working with specific DSD [direct store delivery] vendors to ensure shelves are properly filled and modifying staffing schedules and restocking procedures to address potential out-of-stocks."

Supervalu is implementing these changes in both its perishable and non-perishable categories. The perishable program has been deployed in 322 stores, with 73 stores piloting the non-perishables program. "We expect both programs to be in all the traditional stores by the end of fiscal 2012, though the full benefits will not be seen until early fiscal 2013 when the programs reach maturity," said Herkert during a recent conference call discussing the retailer's financial results for Q4 of fiscal 2011, which ended February 26, 2011.

Herkert also identified advances in the retailer's "hyperlocal" strategy. "This year we invested in our store directors with new leadership training and empowered them with more control over their stores," he said. "These leaders have now been given control over 25% of their store end caps, which will increase to 50% later this summer, and they now have the authority to tailor the assortment and offering of their stores to best meet the specific needs of their communities."

In addition, Supervalu is using detailed data to "reinvent our category strategies," said Herkert. "At our January Summit, we spoke with our top suppliers about how we can more effectively partner together and explained to them that we can understand profitability at the unit, category and vendor level, information we previously did not have," he noted. "With this insight, our merchants can negotiate with our vendors with the goal of finding ways to collectively move more units through our stores."

For related content see: Supervalu Implements Promotion Analytics, Accelerates Localization