How Grocery Stores Decide What Products To Stock

A lot of work goes into curating the grocery shopping experience. From local grocery stores to big-name supermarkets, stores of all sizes take months to decide which groceries reach the shelves. With millions of products to choose from, how do stores decide what items to stock? The process begins with suppliers. 

While the exact procedure varies based on the size of the brand or store, in general, suppliers like farmers and manufacturers hire product representatives, brokers, or distributors to represent their products. It's the representative's job to sell the brand's goods to grocery stores. To do this, they have to pitch a grocery store's or chain's purchasing manager. Ideally, purchasing managers are experts at coordinating and buying for their stores. Before approving a purchase, they have to take a lot of factors into account. 

First, they consider the store's budget. Managers work hard to restock familiar products and bring in new ones, but they have to achieve a good profit margin with all the goods they bring in. A profit margin is the percentage of revenue stores have left over after expenses. To maintain profitability, a manager might reduce stock orders to clear existing inventory or work with representatives to get better deals. Another factor is stocking items with a range of turnover levels. Managers buy a mix of high-cost luxury products with low turnover as well as lower-cost items that fly off the shelves to keep the money rolling in. 

Profit aside, managers have to think about customer preferences too. If a store is based in a region with a higher population of parents with young children, they might stock more products for kids. Or if a city has more vegan clientele, they might stock more alternatives to meat, cheese, and dairy. Managers can also get customer preference information from the store's data showing what's been selling and what hasn't. Other factors, like a product's shelf life, retailer return policies (if customers don't buy), and how new products fit in with existing ones is also taken into account. For example, a newly released pumpkin craft beer is unlikely to appear on the shelves of a store that stocks only cheaper alternatives, no matter how popular it becomes.

Managers strive to maintain familiarity while introducing exciting new options like limited-time seasonal products. From there, they can figure out how to best utilize a store's limited shelf space, restocking what's popular and nixing what's not. A lot of discussion and data analysis goes into this process, and it isn't an exact science. Instead, it's something of a well-informed betting game. Sometimes, a product is popular for a few weeks and the excitement dies down, leaving grocery stores to deal with expired food. Or a product unexpectedly goes viral, for example, and there isn't enough stock for all the interested customers, resulting in a gaggle of unhappy shoppers all vying for the same limited resource. It's a delicate balancing act. 

So, the next time you go into a store, know that you're walking into a carefully curated space. Even the long grocery store aisles are a trick to keep customers buying more.