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How Do Grocery Stores Keep Track of Inventory?

Whenever you go to grocery stores, you will see thousands of products arranged on shelves rows after rows. They are arranged according to usage, prices, discount offers, and so on. When you search for a product, the employees of the store tell you if the product is available. So, it is natural to wonder, “How Do Grocery Stores Keep Track of Inventory?” 

Most of the modern grocery stores use inventory management software to keep track of their products. However, the managers and staff are often responsible for entering information into the system. So, they have to be aware of the products in the shop. 

In this article, I am going to discuss how grocery shops keep track of their products. The products need to be restocked, removed, or disposed of from time to time. So, both human resources and technology are important to manage the shop inventory. 

Below there are 2 videos that explain an offline and an online system to keep track of inventory in a grocery store, for more information keep on reading below the videos.

Older but Good System to Track Inventory of a Grocery Store

Newer System to Track Inventory of a Grocery Store

Managing Grocery Inventory

Modern grocery stores or supermarkets follow more or less the same process while they manage their product in the shops. Managing supermarket and grocery inventories is a combined system of employees using technology to make their work easier and quicker. Here are some common steps the shops go through:

  • Ordering Products
  • Receiving the products and scanning barcodes
  • Managing accurate record 
  • Tracking sold products and update on the software
  • Removing damaged and expired products
  • Using the software to replenish products

To keep a complete record of the products coming and going from the store, these steps are crucial to maintaining the stores. For the profit of the business, the shops need to maintain the flow. I will explain these steps for a better understanding. 

Ordering Products

The process of keeping track of the products begins very early. Shops start tracking the flow of coming products when they order them. The order of the products can be done by the management software of the grocery shop or the shops can directly contact the retailers.

When a shop orders new products from retailers, the manager of the shop keeps a record of ordered products. He or she then uploads the information on the inventory management software. 

Receiving the Products and Scanning Barcodes

The ordered products are delivered to the grocery shop, or the manager of the shop can collect the products from the retailers. When the products arrive at the doorstep of the shops, they are scanned to be updated on the existing product lists. The manager and staff have to count every package, boxes, and bags before they list them in the inventory. 

Every product has a barcode on them. The system softer scans those barcodes to add details (quantity, price, expiration date, etc.), about the products on the system. However, there can be products that may not have any barcodes. For that, the employees have to update the products into the inventory management software. 

Managing Accurate Record

When the products arrive in the store, they come with tags. The tags have all the details about the products. To upload the products in the inventory record, someone has to collect the tags from the products. Losing even a single tag or skipping can lead to miscalculations. 

While collecting the tags the person has to count the products accurately so that he or she can upload the details in the software properly. Matching the ordered and received products is one of the most important processes of tracking the inventory. Also, the products which have no barcodes need to be separated and carefully typed into the system.

Tracking Sold Products and Update on the Software

Once the new products arrive in the shop, they are updated with the rest of the inventory record. The software tracks information like UPC, the Department, Vendor Number, category, cost of the items, and what price the shop is selling the product. 

The inventory management software systems can track every item at the point of sale. So, whenever a product is sold or removed, the record also changes. 

For example, when a customer buys any products, he or she places the products on the cash counter to pay for them. The cashiers scan the barcodes of the products with a barcode scanner. The barcodes have the individual item number and the Universal Pricing Code.

The management software will check each product and price. Then update the information as part of the sale. After the sales complete, the system software will automatically remove the products from the inventory counts of the shop. In case the product has no barcode, the shop has to separate it. 

The manager of the shop has to make sure that the software is updated every day and count the products of the inventory if it becomes necessary. This way, the manager and other employees of the store are updated about the goods of the shop.

Removing Damaged and Expired Products

The staff of the grocery stores can stay updated about the expiration dates of products through the management software. When new products arrive, the software counts them as a whole of the inventory but keeps it separate from the older products. 

The production and expiration dates of all the products are in the database system. So, when the products are closing to expire dates, the staff are notified. The staff of the shop is also asked to do regular monthly and yearly checkups of the goods in the inventory.

Besides, the staff have to check for damaged goods. The software notifies the expiration dates, but it cannot identify damaged products. For that, the staff has to scan the goods of the store to make sure they are not damaged. 

So, if any product is expired, close to expiring, or damaged in the inventory, the staff separates them from the inventory. The shops often put close to Expire products and damaged products on sale, which is also counted by the inventory system.

Using the Software to Replenish Products

It is not always possible for the manager to check what products are running out from the stock. Also, checking the inventory every day takes a lot of time. However, the inventory management software systems are quite useful in this case. 

The system keeps count of the products which are sold. When the products of the inventory are about to finish, the software generates a list for restocking. The shop can then buy the necessary products according to that list. Moreover, the software is programmed to replenish or restock items by automatically ordering the products. 

Repeat of the Cycle

When the shop runs out of products, the same cycle of ordering products, receiving goods, updating the inventory, checking for damaged goods, and tracking sold products continues. 

Every time the circle repeats the inventory management software makes sure to keep track of the products coming and going from the inventory. The shop not only depends on the software but also on every staff in the shop. It is the responsibility of the employees of the store to cross-check the list of the products with the list of the software.

Grocery Store Inventory Excel Template Tutorial

The Importance of Keeping Track of Inventory

Now, why do the shops keep track of their inventory? Well, the answer is to make sure they are not losing any product that can eventually lead to a loss for the grocery store. You cannot be sure how much product you have in the inventory just from the software. Someone has to count every bag, boxes, bottles, or individual products to be sure. 

Surely, the inventory management system does an outstanding job of counting the products and managing the accounts. However, without human intervention, it is impossible to run a shop. 

It is often easy to make mistakes or misuse the use of technology. It is normal to make mistakes while updating information on the computer. Miscalculation or error in counting is normal too. To avoid making mistakes that can lead to even a little loss, the shop has to keep track of the products.

Besides, some people take advantage of situations. For example, if the shops are careless about counting the products regularly, anyone can steal products from the inventory. They can even mislead the accounts. So, it is better to check the inventory both manually and automatically to find out the daily profit or loss of the shop.

Another reason for tracking inventory goods is for buying products that run out and knowing when to restock them. A grocery store may end up losing a large number of customers if it cannot restock demandable products in time. 

Also, customers who are new in the store may want to know where different products are located in the shop. The staff have to have enough knowledge about the availability of products in the inventory so that they can answer questions of the customers.

So, here’s everything there is to know on how do grocery stores keep track of inventory. As you can see, the grocery store owners use both employees and inventory management software to manage the inventory of the shop. Without proper tracking and management of the products, it is quite impossible to run a successful grocery store. 

Hopefully this article was enough to quench your curiosity. Thanks for stopping by.

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Author Ferdi
Written by Ferdi Vol
Ferdi Vol has been working for a grocery store for the last few years and he knows all the ins and outs of running a grocery store. He's also got great tips about what you need to know as a customer, from getting the most out of your money to knowing where everything is in the store! Ferdi loves sharing his passion with others via his blog on how to have an awesome shopping experience at your local grocery store.
About Ferdi Vol
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