What is a stockout in retail?

A stockout in retail refers to a situation where a retailer runs out of stock of a particular product. This scenario can lead to lost sales because customers may choose to buy their desired items from a competitor if they cannot find them in the store. Stockouts are particularly detrimental as they impact customer satisfaction and can damage the retailer's reputation.

Retailers strive to maintain optimal inventory levels to avoid stockouts, often using data analysis and inventory management systems to predict demand accurately. Achieving the right balance ensures that the retailer can meet customer needs without overstocking, which can lead to additional costs or markdowns on excess inventory.