Store Inefficiencies Cost Industry 1% of Sales, Sharegroup Says

A year-old sharegroup that includes two major food retail chains and five large CPG companies has identified gaps in implementation of merchandise plans and promotions at the store level that it says costs food, drug and mass channels approximately 1% of annual gross product sales, or an estimated $10 billion to $15 billion dollars.

PITTSBURGH — A year-old sharegroup that includes two major food retail chains and five large CPG companies has identified gaps in implementation of merchandise plans and promotions at the store level that it says costs food, drug and mass channels approximately 1% of annual gross product sales, or an estimated $10 billion to $15 billion dollars. The self-funded sharegroup, known as the In-Store Implementation (ISI) Sharegroup, believes that an industrywide effort, akin to the Efficient Consumer Response initiative organized in the early 1990s, will be necessary to address the shortfalls in store practices the group regards as pervasive in the retail industry. Sharegroup member companies include Giant Eagle, Schnucks, Procter & Gamble, General Mills, Anheuser-Busch, PepsiCo, Nestle Purina, The Partnering Group, Driveline, RetailTactics and VSN Strategies. “These are costs in our industry that we can’t afford to pay,” said Ray Smaltz, vice president, grocery category management for Giant Eagle here. The store-level implementation issues identified by the ISI Sharegroup, which details them in a new white paper posted at www.instoreimplementation.com, center around planogram compliance, assortment rationalization, center-store space allocation, display and promotion compliance and speed-to-shelf of new items.

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