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Is the Time Right for Perpetual Inventory?



Does perpetual inventory in your mind seem a lot like dating a movie star —nice dream, but hardly reality? With tens of thousands of items in each store, localized assortments, unknown loss, and unreliable SKU counts, the idea of knowing the exact inventory balance of each item in each store in real time, and keeping this count accurate over time, may sound a bit farfetched.

But is it? Leading grocery companies are, in fact, leveraging perpetual inventory practices and technology today to provide item-level visibility across the enterprise, reduce inventory levels and costs, improve inventory turns, and better understand demand and loss by store. As a result, they can do a much better job than their competitors at getting the right product mix and quantities into each store to match demand. This can make a critical difference because in today’s segment-blurring retail marketplace, grocers are competing with everything from big- box retailers, such as Walmart and Target, to restaurants, drug stores, dollar stores, convenience stores, and even Amazon-Fresh for consumers’ food and grocery dollars.

In addition, how consumers are shopping is changing. Progressive Grocer reports that 33 percent of grocery shoppers are now using mobile apps and online sites to stretch their shopping dollars. As these discount options continue to gain popularity and cut into already razor-thin margins, operators must become even more efficient to stay profitable. The companies that succeed will be the ones who best meet these changing customer expectations while also achieving corporate cost and margin targets. Perpetual inventory can be an underlying foundation for achieving these results.


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