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Home > Industry at Work > Unsaleables

Unsaleables

Unsaleables are any food or consumer products deemed to be unfit for sale through primary market channels. There are many causes of unsaleables throughout the supply chain ranging from package design to product handling. The industry has been working collaboratively on this issue for over 10 years. In 1996, the industry undertook an initiative in collaboration with trading partners to identify and implement ways of reducing the cost of unsaleables. With support from the ECR Committee on Unsaleables, Canadian grocery manufacturers and distributors who have signed the Protocol for Enrollment have been following an industry recommendation that includes a benchmark system, a list of eligible products and best practices for reducing unsaleables.

For more information on this industry initiative, see the following resources:

• A User's Guide for the ECR Unsaleables Recommendations [French] – Effective May 2011

  • At the December 2, 2010 meeting of the Board of Directors, it was agreed to endorse the Joint Industry Unsaleables Committee’s recommendation to increase the handling rate effective May 2011 to $0.45 from $0.43.
  • In 2010, the Joint Industry Unsaleables Committee in conjunction with The Marketplace Capabilities Group, conducted a benchmark study to determine the true cost of the handling rate.
  • Concerns addressed for the study included: the completeness of cost analysis, specifically exclusion of costs associated with item disposal at store level and removal from internal inventory systems, rigor of current approach and single rate approach.
  • The new protocol includes the following handling cost findings and recommendations:

  • increasing handling rate for store level or reclamation centre damage to $0.45 from the current $0.43 –implemented in May 2011

  • maintaining the current handling rate for warehouse identified damage at $0.34

  • maintaining current single rate approach

  • maintaining current methodology – believe a more accurate approach will be cost prohibitive

  • setting regular review timetable – recommend every 2 years

 Moving forward, the joint industry committee has agreed to develop a more proactive plan to manage Unsaleables.