Convenience Store Inventory Management, With a Workbook

Convenience store inventory management is five jobs, done every week: ordering each vendor's items back to par, checking route deliveries at the back door before the driver leaves, selling dated food oldest first, counting the store in sections, and writing down every loss with its reason. A store makes a few cents on each dollar, so the losses are where the profit goes. In the example below, a Memphis store finds $104 of route deliveries short at the door in a month, all credited, and $738 of losses at cost, 1.8% of sales, half of it dates gone by. Below is each job, the month, what to look for in software, and a free workbook.

The short version

• Order to par by vendor: what sells between deliveries, plus a cushion.
• Count route deliveries at the door against the invoice and get credits before the driver leaves.
• Rotate dairy, bread and grab-and-go oldest first; order the short-dated case smaller and more often.
• Count fast, dated and stolen-from sections weekly, slow ones monthly, the whole store once or twice a year.
• Record every loss with a reason: expired, damaged, theft, or a count that came up short.
• TaroStack keeps dates on perishables, records losses with reasons, and lists what to reorder by supplier. More below.

The five jobs

Soda, snacks, bread and milk often come by direct store delivery: the vendor's driver brings the product, stocks the shelf and leaves an invoice. It saves the store work, and it's where cases get invoiced that never reached the shelf, so the delivery is counted before the invoice is signed.

An example: a month at a Memphis store

Bluff City Market, a made-up convenience store in Memphis, Tennessee, I use in these examples, sells $40,000 in October. The route deliveries, counted at the back door:

Seventy-seven units out of 5,150, 1.5%, and each was credited because it was found before the driver left. Over twelve months that's about $1,240 the store would otherwise have paid for and blamed on theft.

The losses, at cost, by reason:

Half the loss is dates. The bakery and grab-and-go case threw away $208, about a sixth of the $1,200 of goods it bought, so it now orders sandwiches every other day instead of twice a week. The $212 nobody can explain sits in the drink coolers and the candy aisle, which is why the coolers are counted weekly and the candy every two weeks. How first-expired-first-out differs from first-in-first-out is in FEFO vs FIFO, and what to do with stock past its date in what is expired stock.

Par levels and ordering

A par is the most of an item the shelf should hold after a delivery: what sells between deliveries, plus a cushion for a busy day. Order what's missing from par. For a route vendor who stocks the shelf, the driver often sets the par; check it against what sells, because the vendor's goal is a full shelf. When par levels suit and when a reorder point suits better is in par level vs reorder point.

Counting by section

A section counted weekly shows a loss while the camera footage still exists; a store counted once a year only says the year was short. How to run a count is in how to count inventory, and a sheet for counting a few items each day in cycle count form.

What to look for in software

A register that takes each sale off stock as it's scanned; receiving by vendor, with the invoice; dates kept on dairy, bread and grab-and-go; losses recorded with a reason; counting on a phone by barcode, section by section; and a reorder list by vendor. More on scanning in inventory software with barcode scanner, and what Square's own inventory covers in does Square do inventory.

Get the workbook

Download the convenience store inventory management workbook. Four sheets: deliveries, one line for each item on a route invoice with what was invoiced and what you counted, where the shortfall and its cost fill in; losses, one line for each with its reason, where the cost fills in; losses by reason, totalled and as a share of sales; and counts, each section with how often it's counted, where the next count date fills in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Three thousand items, five route vendors and a wholesaler, forty-seven deliveries a month, milk and sandwiches with a date on every one, and seven sections on different count schedules. A workbook records the losses after someone writes them down; it can't say which milk expires tomorrow, or what each vendor's order should be this morning.

How TaroStack does it

TaroStack keeps dates on perishables, records losses with reasons, and lists what to reorder by supplier.

Dates before they go by. Dairy, bread and grab-and-go are received with their dates, the oldest goes first, and an alert comes before a date runs out, so the sandwich is marked down on Tuesday, not thrown away on Thursday.

Losses with a reason. Every adjustment carries its reason, lost, damaged, expired, spoiled or found, so the month's $738 is reported by reason, item and site. Counting on a phone by barcode suggests what to count first, by what it would cost to be wrong, and shows what a variance is worth before you post it.

Orders by vendor. Suppliers keep their lead times and minimums, a reorder list in days of cover says what to order from each, and deliveries are received with or without a purchase order. A photo of a vendor's invoice is read into rows to check before anything is saved.

Counts, losses by reason, expiry and reorder lists are on every plan, from $49 a month, with no limit on items; TaroStack connects to Square. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

How do convenience stores keep track of inventory?

Sales come off stock at the register, deliveries are counted in at the door, losses are recorded with a reason, and the store is counted in sections to catch what the records missed.

How often should a convenience store do inventory?

Fast, dated and often-stolen sections weekly, slow ones monthly, and the whole store once or twice a year. In the example, the drink coolers, dairy and grab-and-go are counted weekly.

What is direct store delivery?

A vendor's driver brings the product, stocks the shelf and leaves an invoice. Count the delivery before signing; in the example, 77 units were short in a month and all were credited.

How do you reduce shrink in a convenience store?

Record every loss with a reason, order short-dated food smaller and more often, count the stolen-from sections weekly, and check route deliveries at the door.