beardyramen t1_jabun88 wrote on February 28, 2023 at 8:35 AM

Reply to comment by Silver-Ad8136 in ELI5: why do grocery stores in the US keep such a large inventory? Aside from being prepared for episodic panic buying like toilet paper or bottled water, is there an economic reason to do this? How much of the food ends up going bad? by DrEverythingBAlright

It says that companies try to keep it to a minimum. But surplus means "more than needed".

So companies stock more than needed. In part to compensate for demand fluctuation, in part to optimize procurement costs, in part to provide the customer with a pleasing visual experience.

Sadly, to sell 10 apples we currently "need" a stock of 13.

Then, i'm not your mom, nor your boss. You are free to have your own opinion on procurement strategies of grocers. Not every retailer works the same way, some are more virtuos than others.

But as a matter of fact the western world wastes about 1/3 of its food pipeline.

I am telling that this is not due to incompetence of supply planners, but due to deliberate planning. We accept an inefficiency there for a positive outcome in another point of the chain.

Should you disagree with my opinion, you are welcome to. I will believe you to be naive in thinking that losses of this magnitude are not accounted for accurately, but I will respect your position.