Before you chase new sales, count the ones an empty shelf cost you

It’s an old retail saying that the sale you lose most often is the one where the customer wanted something you didn’t have on the shelf. Most retailers would agree with it. Far fewer can say what it cost them last month, because a sale that didn’t happen leaves nothing on the till roll.

This year that matters more than usual.

What it takes to stand still

Consumer prices rose 3.1% in the twelve months to August (ONS). If your takings grew by less than that, you sold less than last year in real terms, even though the figure at the bottom of the report went up. To hold your position you need roughly 3% more through the till before you have grown at all.

Most retailers look for that 3% in new customers, new lines or a promotion. The cheaper place to look is the lines you already sell.

What empty shelves cost

IHL Group estimates that running out of stock and holding too much of it will cost retailers around $1.7tn worldwide in 2026, equal to 6.2% of all retail sales, and that out-of-stocks account for 65.6% of that (Retail Insight Network). Put those two figures together and out-of-stocks cost roughly 4p in every pound a retailer takes.

That is an average across every kind of retail, so yours will be higher or lower. But on those figures, the sales lost to empty shelves are bigger than the 3% you need to stand still.

Why your reports don’t show it

A sales report shows what sold. A line that was out of stock for a fortnight looks exactly like a line customers went off: a dip, then a recovery, or a dip that lasts until somebody drops the line from the range. Some of the customers who couldn’t find it bought something else. Some bought it from somebody else, and may have done the rest of their shopping there too.

So the first question to ask about a line that has stopped selling is whether it was on the shelf.

Put a price on one line

You can price a stockout from your own sales history. Take a line you always stock and that normally sells every week. Say it sells 20 a week at £4, which is £80 a week. Last month it showed no sales for ten days. That is about £115 of takings gone, before counting anything else the customer would have bought on the same trip.

Do the same for your 20 best-selling regular lines over the last three months and you have a figure for what empty shelves cost you this quarter. It won’t be exact, but it gives you a number to work with and a list of the lines it came from.

See the next one coming

Pricing past stockouts tells you how big the problem is. Preventing the next one takes one more sum.

Divide the stock you hold of a line by what it sells in an average day. That is its days of cover. Compare it with how long your supplier takes to deliver. If a line has six days of cover and a ten-day lead time, it will run out before a new order can arrive, whatever you do today. If it has twelve days of cover and a ten-day lead time, today is the day to order.

Run that across your regular lines, sort by weekly sales value, and you have a short list of the turnover you are about to lose and the orders that would save it. By hand, that is an afternoon with a spreadsheet. A stock system that holds your sales history and your suppliers’ lead times can do it every morning.

Three questions for this week

• Which ten lines bring in the most each week, and was any of them out of stock in the last month?
• When a regular line stops selling, can you tell whether customers stopped wanting it or you stopped having it?
• Which of your regular lines will run out before their next delivery arrives?

If any answer needs a spreadsheet, start there. Take your 20 best-selling lines, work out days of cover for each against the supplier’s lead time, and repeat it every week for a month. By the end you will know which lines run out, how often, and what it costs you.