Out of Stocks are Eating 65% of Your Losses

Today it is about inventory distortion. Out of stocks are eating 65% of your losses. Welcome to this week's Retail Reality Check, a podcast on the latest tech installs in retail and consumer product goods, brought to you by IHL Group. I'm Clare, your host, and so glad you have joined. Before we get into this week's stories, I want to let you know our webinar replay, When Agents Shop: Inventory Cannot Lie, is available right now. It walks through the full 2026 Inventory Distortion Study, plus a look into the worldwide retail economy. The link to the study and the replay can be found in the description below. This week we are showing retailers actually attacking inventory distortion instead of just talking about it. Greg is the president of IHL Group. Let's get his input.

Claire, I literally just finished the webinar. So retailers used to just talk about inventory distortion, but now they're actually doing something about it. What's driving the change? Robots, computer vision, AI-powered tools combined with proper application. Each of these tools on its own is a modest win, but when they're layered together, they create a disciplined, data-driven workflow that separates the fix-it retailers from the ones who are still just managing around the problem.

Our first dive, Homebase USA, is deploying Simba's tally robot chain-wide across Texas, Wyoming, Kansas, and Missouri after a pilot that cut pricing errors 92%, cut controllable out-of-stocks 58%, and dropped inventory counting time from 3 days to under 1. That kind of result is exactly why IHL has been tracking this space closely. Our Shelf Intelligence report found that 72% of retailers say they would accept in-store robots, but only 17% actually use them today. Homebase just moved itself well ahead of that curve, and the real question now is whether whether they own the fleet outright or subscribe to it as a service, because that choice is going to shape the economics for years. Next, Heinen's is rolling out Afresh's period-ending inventory tool across its fresh departments—produce, meat, deli, cheese, and bakery—replacing manual after-hours counts with AI-powered estimates. This one matters because perishables are the category most exposed to distortion. Our 2026 Inventory Distortion Study found that out-of-stocks account for 65.6% of total distortion loss, with overstocks making up the rest. Tighter perishable forecasting attacks both sides of that problem at the same time. And because Heinen's already used Afresh for store ordering, this rollout was seamless. And then there's Village Supermarket testing Focal Systems' new computer vision tool, TopStock, which gives hourly above-shelf inventory visibility without manual audits. In a 1-month pilot, Shoprite recovered $24,000 in unaccounted inventory and cut audit labor 75%. IHL's research on computer vision found a similar system improved shelf availability by 16% and cut out-of-stock incidents by 30% at Walmart. If Village Supermarket sees anything close to that, this small pilot turns into a template other regional grocers are going to want to copy fast. Two more stories round out the deep dive, and they are less about inventory itself and more about what happens once the operational basics are handled. Lululemon is scaling AI across customer service, marketing, and supply chain with Google, Microsoft, and Salesforce. Google's Performance Max already boosted their return on ad spend 8%. IHL's research on generative AI deployment found that sales winners run task automation at a rate 19% higher than laggards. So Lululemon's push fits a pattern that is already showing up in the data, as long as it stays focused on measurable tasks. And Minor Hotels is accelerating its global digital transformation with Oracle OPRA Cloud across 106 properties in 59 countries, centralizing reservations and guest data across brands like Anantara and NH Collection. IHL's Unified Commerce research found that retailers using AI and machine learning in order management expect 92% higher profit growth than those who do not. Consolidating systems like this is exactly the kind of move that separates profit winners from everyone else. None of these 5 moves are flashy on their own—robots, AI counting tools, computer vision, cloud migrations. But stacked together, they show what operational discipline actually looks like when a retailer decides to stop managing around inventory distortion and start fixing it. Now, in our lightning round, let's move fast through the rest of this week's news. Walmart closed its $1.4 billion acquisition of Vibe.co, a self-service streaming TV ad platform, expanding Walmart Connect's connected TV capabilities for small and mid-sized sellers. Nissin Foods USA adopted Blue Yonder's AI and machine learning powered demand and supply planning tool implemented with partner Highspring to replace legacy planning systems and improve forecasting accuracy. UK value retailer B&M wrapped a point of sale rollout across more than 790 stores, partnering with PMC and provider Fluid to speed up transactions and cut till friction. ASDA is rolling out Aura's crime intelligence platform nationwide after a 10-week London pilot recovered more than £100,000 in stock and cut incident reporting time 80%. Aura is also live at CEX across 390 UK stores. DoorDash Air. DoorDash's in-house drone program received FAA Part 135 air carrier certification, authorizing autonomous flight operations built with American-made components. 7-Eleven named Ibotta the exclusive third-party provider of CPG digital offers across its 7-Eleven, 7Now, and Speedway apps, spanning more than 11,500 US stores. Academy Sports and Outdoors launched Academy Retail Media, a new network connecting brands with its 52 million verified customers across more than 320 stores. Kohl's debuted an AI shopping assistant built on Google Cloud's Gemini Enterprise, expanding its Mother's Day gift finder into personalized recommendations, comparisons, and image search. Foot Asylum cut the ribbon on its first AutoStore automation system, with 85 robots eventually running across more than 96,000 bin locations built with THG Fulfill. IHG launched AI-powered natural language search, letting guests request rooms in plain English instead of picking from fixed categories, finally giving attribute-based selling a real consumer interface. Argos revived its catalogue experience with a new app feature called Your Catalogue, bringing personalised recommendations, trend edits, and lookbooks to iOS and Android. And Wakefern Food is partnering with IA on a 12,000-square-foot centralised pharmacy fulfilment centre serving 149 ShopRite and 2 Fresh Grocer pharmacies starting early next year. So here's a question to sit with this week: 72% of retailers say they would accept in-store robots, but only 17% actually use them today. If your business is somewhere in that gap, what is actually stopping you? Budget? Integration? Or just not knowing where to start? If you want to dig into any of these stories further, head to ihlservices.com, where you'll find over 50 additional stories from this week alone, plus free white papers covering everything from inventory distortion to computer vision to unified commerce. Thanks for joining into the Retail Reality Check. We'll see you back here next week.