Study: Retailers lose $1.1 trillion in global inventory distortion

Franklin, Tenn. – Retailers lose $1.1 trillion worldwide due to inventory distortion. According to new research from IHL Group, by fixing problems such as out-of-stocks and excess inventory from overstocks, retailers could improve their revenues by 7.5%.



The combined cost of poor merchandise planning alone equals $452 billion. Inventory distortion costs retailers nearly $158 for every person on the planet, and $252.2 billion annually in North America. The Asia/Pacific region contributes 39% of all inventory distortion.



“Enhanced forecasting tools and focus have helped recoup $10 billion in losses in North America and Western Europe in the last three years," said Greg Buzek, president of IHL Group. "But an expanding global middle class and retail expansion increased the total inventory distortion problem worldwide.