Personally, I'd prefer to see empty places where a product is sold out, than have to spend extra time coming to that conclusion by examining everything else nearby.
Yes! Especially in a place like Whole Foods, where I'm looking for particular products, and I'm not going to return if it's not apparent that WF stocks what I want.
That's exactly the reason for this policy. One of many reasons, actually.
But it actually is meant for things on regular shelves, it doesn't apply to the produce department, which is what all the pictures in this terrible article show. It also doesn't apply if the product is going to be out-of-stock for a known period of time. It's meant for situations where the buyer didn't order enough and it will only be out for a day or two.
I'd prefer they just put up a sign saying "sorry, we're out of bananas" and putting something else there in the interim. The employees are right: empty shelves look sloppy. Too many and the place even looks like it's going out of business.
I have never seen an empty shelf in any major brand store. The idea is insane. Especially for a store targeting an upmarket clientele with high prices.
It gives the store a scruffy, downmarket image. Also, it removes convenience. If I cannot get all the items on my list at a single store, then I will immediately stop going to that store...likely to never return.
Companies have been trying to reinvent the grocery store for decades now. What can be done has already been done, and now they are trying to alter the way their customers shop. Guess what! That doesn't work.
" If I cannot get all the items on my list at a single store, then I will immediately stop going to that store."
You've got it completely backwards - this new policy is designed for you - the goal is to ensure they always keep product in stock, and the "holes" are a forcing function. Previously WF would just put something else in place, thereby reducing the pressure to restock. Now, the goal is to quickly as possible, ensure they have everything available.
No, it's completely not designed for me. My local supermarket has kept the same items in the same places for 5+ years. They keep things in stock by going to the store room and filling shelves up when they get low. Just In Time Delivery works when you are building cars, but it falls flat on its face in a grocery store. If I see an empty shelf, I assume the business isn't being run properly. If I can't get all my shopping done in one place, I go to a store that gives me that option.
Trying to get consumers to change their grocery shopping habits never works.
> the goal is to ensure they always keep product in stock, and the "holes" are a forcing function
This empty shelves thing is enough of a thing that it seems like it's not really working.
And empty shelves sends such a terrible message to everybody who encounters them that I question the wisdom of who picked that as a "forcing function." Whenever I see that in a store, it just reeks of failure and decay.
Whether they "re-face" a shelf with another item or leave it empty, you're not going to get the item on your list. This policy is a wash in that regard.
Alternatively, if staff can glance at a shelf and know what to reorder more easily and customers know exactly where to find something every time, that seems like a win for you and them.
The headline hints--to this non-industry reader--at a dark ulterior motive, like perhaps driving customer behavior by suggesting scarcity. But I would welcome a policy that leaves the cilantro shelf space empty rather than fill it with parsley.
I think the writer is genuinely shocked as to how the leading luxury food retailer can have their grocery stores looking like Venezuela. They are just trying to make sense of it.
The answer seems to be that management is grossly incompetent and totally out of touch with reality which are pretty important facts for investors to be aware of.
Of course, there are a lot of people who would very much like Amazon to fail here, so that may have something to do with it to.
"they" didn't build it by having their shelves empty. management turns over all the time so who knows whether the people responsible for this debacle had anything to do with whole food's earlier success.
WFM stock had been way down from its highs because the business was doing poorly prior to the amazon acquisition.
No, but I do know they are incompetent, don't understand the fundamentals of their business, and are out of touch with their employees and customers.
This empty shelf scheme fails hard in two important and obvious ways:
1) negative effects on customer perceptions from seeing empty shelves.
2) stores are in the business of selling stuff and shelf space is a scare and precious resource. Empty shelves means no sales and lost revenue for that space. If you run a store empty shelves is a 100% sign of incompetence.
Now, the overall scheme seems to be based on a theory that having empty shelves will lead to them being restocked with the correct items more quickly. That is plausibly rational on the surface but actually comes down to magical thinking.
If you lack the organizational ability to get shelves stocked correctly in the first place leaving them empty will not magically change that.
What you have here is management trying to increase revenue and instead of having a real plan for how to do that they have put in place a set of policies that rely on it happening by magic and then blame people on the floor when it fails.
This is pretty much the definition of incompetent and out of touch management.
I was thinking more along the lines of a subconscious effect: "Hmm, an empty space at Whole Foods, that's a bit odd. Is a hurricane coming? Maybe I'd better get more canned goods/potatoes/coffee."
If you live by just-in-time-inventory, you will die by just-in-time-inventory.
It's one of those things that sounds good on paper, and can work, but it's damn hard to get right in real-life. The JIT model assumes you have the necessary data and models to predict when things need to be ordered, how long they'll take to be shipped out by the supplier, how long they'll take to arrive, etc. In reality, there are a LOT of variables that you can't (or at least "didn't") account for in your model.
It probably makes sense to start the system running with the parameters configured to allow a little more back stock in order to avoid outages, and slowly tweak it to get closer and closer to "pure" JIT. And even then, you need a way to account for abnormal circumstances like a snow-storm in Florida, or other "that just doesn't happen" scenarios.
Probably Whole Foods will eventually get their system tuned well enough to avoid the major problems, but it does take time to get it right.
That's not what this is about at all. It's about making sure things that are out are reordered and moving, and punishing stores that have historically made things look "presentable" by hiding the fact they are out of things and playing around with shelf space, thinking they know better than the people who set the shelves/corporate on what items actually sell. When you have people that monkey around with things like that, it defeats any work that analysts do to optimize ordering and sales.
That's not what this is about at all. It's about making sure things that are out are reordered and moving
Those things aren't an issue if you avoid outages to begin with. And while this specific link may have been referring more specifically to the re-facing issue, there is a broader story in play here, including another, different article about Whole Foods, which is more about their general ability to keep items in stock. I'm addressing the broader issue in my post above.
This policy, especially combined with a policy of keeping low backstock, is actually the best way to make sure you keep items on the shelf and moving.
It means that it's easy to find stuff in the back room if you are out on the shelf, it's easy to tae inventory and have accurate stock counts (and fix if you are off), and it's easy to make sure you don't end up with some idiot facing the aisles obscuring that you are out of stuff on the shelf when you have some in the back room (and reducing sales). Relatedly, it's a good way of making sure you order the right amount of things that sale and the right amount of things that don't sell.
It's how you should run a grocery store. Most grocery stores get in new grocery loads 3-4 times a week, so there's not a real need to keep a lot of backstock (especially if your shelf space is allocated properly).
If I am reading this correctly - the idea is to ensure both employees and customers are aware something is out of stock items. Previously, OOS shelves were filled with another "high" selling item.
This sounds like a great and useful idea. Instead of confusing customers with another "high" selling item, it is better to have the shelf empty.
Though I am unsure of the policy on "temporary OOS" tags - Why not have it there?
Kroger seems to follow the same playbook from what I can see. Locally, they are often sold out of common produce such as lettuce. Even dry and canned goods are a crap shot. The other night I was looking for canned white beans and the entire shelf section was empty. It's frustrating. They are basically the only grocery option in the area and they do enough business to carry a little extra inventory. As it is now, if I happen to be in an area with another option I'll shop there. This is costing them some amount of business.
It seems strange not to have a back stock of soda.. that stuff never spoils. Maybe it’s a space issue. Same with dry or canned goods. Produce should be cheap enough at wholesale to have some spoilage and they also have these seconds supermarkets that take not quite perfect fresh food and close to expiration date foods. I’d open another store selling those.
Ordering is basically based on velocity and grocery items usually come in 3 times a week. You can tell the manager though. Sometimes the issue is actually that they do have some backstock that hasn't come out, it widely varies from store to store. In fact, they are encouraged to have zero backstock for this exact reason, because the more you have that you haven't gone through, the more likely it is that your shelf count is off. In any case, if you wrote to Kroger they're likely to fix the issue.
Unfortunately, they tend to be a bit harsh in punishment for this sort of thing, it depends.
Central planning was dictating how much of every item to produce and where to distribute it and what price it would be sold for. For whole country for 5 years. This is exactly opposite of OTS.
(Beware of irksome Business Insider adblocker-blocking nag-box.)
As another reader has remarked, “the title hints at some ulterior dark motive” or somesuch, and implies that consumers should be alarmed and horrified by this change of practice. I fail to see how plugging a hole with something else actually makes any shopper’s life better: it doesn’t resolve the scarcity and it induces shoppers to buy things they didn’t intend.
So why the implied scandal?
(Note: I’ve been to Whole Foods perhaps five or ten times in the past decade, because I don’t live in the U.S.)
Stock/inventory management seems like a great, although tough application for computer vision. A decent way to estimate how much broccoli is left without human intervention would facilitate automated ordering and eliminate rules like this one.
The title of the article is also misleading - they're not halting restocking of goods, they've just instructed employees not to patch over gaps with other products.
On the other hand if you were creating test data for a computer vision system you might want to have a bunch of examples where there is no product on the shelves. Possibly because this is an anomaly or doesn't happen. Therefore, they force it to happen.
I don't think automated inventory of produce is that huge a need, but if it is, a scale embedded in the produce bin seems like a much simpler solution than CV/ML
I completely disagree. I've worked in supermarkets, and facing-across products seemed like the most asinine thing in the world.
If a product is out of stock, then the most immediate way to show that is by having an empty shelf.
Instead companies like Walmart prefer to face across products, and cover up barcodes. You would spend a good 10 minutes looking for something very specific, only to have an employee point at something similar, with an obscured SEL (shelf edge label) and say 'if we had them, they would be here'.
There was a big trend when I worked for Walmart to focus on stats like 'Basket Spend', and comparing regional scores. It felt like all the worst examples of AB testing.
There was quite a humorous one where 'key lines' were checked by visitors, so to counteract this, we kept spares of those lines in the back to put out when they visited, later taking them off and putting them back in the warehouse. The end result was these lines never dipped under the restock threshold and were always out of stock... except when they visited.
I like the policy because it reminds the store management and employees of the importance of getting some whatever (onions, etc.) reordered ASAP. And it doesn't paper over the problem. Also in a move that is only partly evil, it helps enlist customers in reminding employees to do their jobs. Which yes the customers would do anyway, but in this system they do it earlier. And with more standing, because pointing to an empty dedicated space is more compelling than wondering out loud to the produce worker whether the store even carries jicama or whatever the product is.
That being said, I have almost never seen empty shelves at any Whole Foods store. And I go to several of them pretty regularly. Maybe my local ones are just well managed. Or maybe they have an easier time in California since some produce can be sourced locally.
Is this based on yet another neuroscience "research" we get to "enjoy" at supermarkets world-wide? "In Soviet something" instantly comes to mind...
Let's emulate shortages, despite queueing solved since 60s and likely warehouse full of necessary stuff nearby. 1st world in the need to emulate 2nd world.
Did this start since WF was acquired or even earlier? When in USA I always went to WF for quality food (you could even buy non-sweet bread there!) and my last US visit I noticed their prices were really up, but didn't notice any other changes.
Funny how walmart (neighborhood stores) never seems to have this problem? at least that's what I see locally.. it's always stocked for the most part unless say we have a Hurricane coming our way!
this isn't a problem that stores have or not, it's just a corporate policy: when a product sells out, do you fill the shelf with something or leave it empty?
People have different opinions on the pros and cons here. But it's not like Walmart always has every single product in stock 100% of the time, that would be super unlikely. If you never see empty shelves, then they just are using the "put something on the shelf" policy instead of the "leave it empty" policy.
It is a problem that stores have or not - some stores have situations where bananas or lettuce are sold out only in exceptional cases i.e. basically never, while others have to decide on a corporate policy on what to do because that's a common occurrence.
The only way to never sell out of bananas is to order enough that a portion always goes bad before selling. No matter how much sales you do, there's an inherent trade-off between the amount waste and amount of temporary sell-outs. That is a problem all stores have to deal with, and they have to choose some policy for it.
Similarly, stores have a policy about what to do when there is a sell-out (leave the shelf empty or put something else there).
Each policy decision has pros and cons, and no store is immune to these issues.
Walmart has built the most effective logistics system in the world. It's one of their most important competitive advantages.
Side note: Certainly Amazon is also very effective at logistics but I see that as almost a different use case than Walmart - i.e. centralized vs decentralized systems
