Getting Started With Demand Forcasting

Sophisticated planning is modest, but growing, in grocery.

- John Karolefski

Wheatsville Food Co-op, in Austin, Texas, relies on a variety of techniques to forecast demand for everyday shopping. There’s a decade’s worth of sales and movement data in its point-of-sale system that can be accessed to determine the activity of a particular item or category.

For seasonal variations created by holidays such as Thanksgiving, the co-op can see what popular traditional items shoppers bought. By comparing past sales dollars, more recent customer count and average basket, a reasonable estimate can be made for the current year.

“While we know that stuffing and turkeys are Thanksgiving staples, we have also noticed the rise in demand for gluten-free bread products and vegan meat alternatives,” notes Niki Nash, packaged manager for the only retail food cooperative operating in Texas. “As specialized diets become more mainstream, our variety and amount of these products have increased. Each year, we monitor these nontraditional versions of traditional favorites for popularity and adjust our orders for the next year. By using a perpetual inventory management system, we make sure that we’re never out of key items.”

Whether they’re co-ops, independent grocers or large regional food chains, companies must maintain the right balance of supply and demand to prepare for surge periods such as Thanksgiving, as well as for everyday shopping. Out-of-stocks during the holidays — or any time of the year, for that matter — may have long-term negative implications for shopper loyalty. In other words, customers change stores.