Falling stock levels are a triumph for ECR

The UK's leading food and grocery retailers are now holding record low levels of stock in their stores as a result of increasing efficiency in their supply chain operations.

According to figures from grocery think-tank IGD, stores now keep an average of 11.3 days worth of stock compared with 12.8 days in 2003.

In its latest report, Retail Logistics 2005, the IGD found that non-foods and frozen food stocks had shown the greatest fall, while beer, wines and spirits, where stock holdings were traditionally high, had shown a slight reduction. It was the first time since 1998 that stock levels had fallen across all product categories.

"Over the past 10 years we have seen a gradual reduction in stock levels as retailers and suppliers have become more efficient," said Tarun Patel, author of the report.

The results showed the impact that the use of efficient consumer response (ECR) practices was having on the grocery and food supply chain, he said. ECR is the grocery industry initiative to encourage distributors and suppliers to work together.

"Having access to information, such as stores sales data, has enabled suppliers to see what is happening at the till and react to the needs of the customer," said Patel.

"Open communication and collaborative practices such as co-managed inventory have enabled retailers to reduce the amount of stock held in their business," he added.

According to the IGD, stocks of non-food goods fell 36% to 12.5 days; frozen foods stocks dropped 35% to 7.9 days; fast moving goods, such as soft drinks, fell 3% to 9.7 days; slow moving goods were down 4% to 10.7 days; and stocks of beer, wines and spirits reduced by 1%.