Just the other day I went to shop to a nearby retail outlet at around 7 in the night for some panic shopping. Found that leafy vegetables were sold for Re 1/ bunch. This is generally sold for not less than Rs 5/ bunch. Then saw Bananas was on 50% off. Was surprised and picked a few (need to mention that the products were not the freshest ones but definitely worth purchasing) Soon as usual was exploring the store . Saw lots of FMCG (Fast moving consumer goods) products on 50% offer ranging from Carbonated soft drinks (CSD), cakes, baking needs product on a table while there were regular products on shelves sold at a regular price.
Went to the store staff and asked about the difference. He explained the product on the table were near to expiry stocks hence were on the liquidation offer of 50% whereas the products on shelves were regular products with sufficient shelf life remaining.
So how do you interpret this situation? As a customer will you buy it or not buy it? As a retailer should you do it or not do it?
Each situation has its own pros and cons. A customers who does not mind such products (maybe have a 15 days shelf life remaining of the 90 days product or not fresh vegetables (generally most of us city dwellers do not buy fresh vegetables everyday anyways) this would be steal. May even compel one to visit the store only in the evening or only to buy such products (that’s another topic for discussion altogether)
Now for the retailer it’s a catch 22 situation. The liquidation offer is given so as to recover atleast certain amount for money instead of the whole stock being expired and the entire money lost. But what if the customers come only in the evenings to buy liquidation offer stocks? What if a customer buys only such products (loss making for the retailer)
In products such as bakery with a shelf life of just a single day remember a senior manager stating that in his store at the end of the day for such products (puffs, samosas etc) the bakery incharge would provide the stock details to him and on his approval the products could be consumed by the staffs of the store instead of being dumped. While this went on for a while one day he found that the bakery incharge was actually keeping the products of his choice behind the counter and stating stock out to the customer by afternoon so that this could be consumed by him at the time of store closure. Now that’s a tragedy! There are such chances if we work on the liquidation offer to save the near to expiry stocks
So how does a retailer go about it? While nothing can compensate for the integrity of the retail staff he can take a few precautions. Ensure the sales targets are met every day/ week so that the store staff is not underselling. Check for the stock planned and ordered. There should not be disproportionate growth planned and stocks taken. Ensure the near to expiry stocks are clearly bifurcated so that even the good stocks are not sold on liquidation due to negligence.
What could be done to avoid such a situation? What are the precautions a retailer can take?
Please share with me.