By George Anderson
The 2005 Unsaleables Benchmark Report from the Grocery Manufacturers Association (GMA) and the Food Marketing Institute (FMI) has found that manufacturer costs associated
with returned product declined last year to 1.06 percent of gross sales.
The progress made on unsaleables has been near the top of grocery manufacturers agenda for years. The rate as reported represents the lowest since annual figures began being
calculated in 1996.
Distributors also saw their costs related to unsaleables decline. Between 2003 and 2004, the average cost as a percentage of sales went from 0.84 percent to 0.76 percent.
Total industry losses to unsaleables are $2.52 billion, according to GMA and FMI.
One retailer, profiled in the case study section of the report, has taken active steps to reduce unsaleables. To accomplish this, the unnamed company put one person at each store
in charge of managing and calculating product. Unsaleables are separated and sorted by out-of-date goods, damaged product and are batched and processed separately before being
sent to the reclamation center.
Moderator’s Comment: How big a problem are unsaleables? What do you see as solutions to the problem from the manufacturer and distributor standpoint?
George Anderson – Moderator