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Seafood University: Don't get stuck with overstock

When the seafood case is overflowing, there are several options for moving product

Good inventory control matches the amount of product on hand to expected sales volume.
Joanne Friedrick
April 01, 2005

Controlling inventory is more art than science, say most retailers. Although you can reference previous sales numbers for a given month, week or day, knowing just how much to order is more a matter of instinct and experience than hard and fast facts.

“You get a feel for how people buy,” explains Greg Caluya, owner of Ohana Seafood Market in Kirkland, Wash. “You know your busy and slow months.”

Caluya says he learned the hard way, during his early years working at Seattle’s famous Pike Place Market, that overbuying can be a costly experience.

“When I was first in the trade, I kept track of waste for one month,” he says, and the number was a staggering $3,000.

What that taught him, says Caluya, is to pay more attention to seasonal trends and to err on the side of too little inventory rather than too much. Now Caluya can predict his busy and slow times based on holidays, weather and which species are in season.

“The whole point is to control your inventory,” says Charlotte Klein Sasso, co-owner with her husband, Bruce, of Stuart’s Seafood Market in Amagansett, N.Y.

“We’re a resort area, so we’re aware of when our busy times will be,” she says. Looking at last year’s sales can be helpful, she adds, but only if you also look at what the weather was like that day.

Weather not only impacts customer traffic on a particular day, she points out, but it affects supply of product. A stormy spell that keeps fishing boats tied up may limit a retailer’s ability to source certain fish, which can keep sales down.

Buying on a daily basis, which many retailers are able to do, also keeps inventory in check.

“We’re lucky in that we have fishermen who come to our door,” says Sasso. “We get first pick and buy for that day.”

“I order one day and get it the next,” explains Tom Cantu, general manager at Quality Seafood Market in Austin, Texas. “[Fresh product] sells quickly.”

Cantu also controls his inventory of live product, such as crawfish that are sold on weekends when they are in season, by ordering only what has been pre-sold from advance customer orders. As a result, he says, waste is 1 percent or less. That’s the same figure cited by Caluya of Ohana Seafood Market.

Still, despite a retailer’s best efforts at controlling inventory, there will be times when the department is left with surplus product. Then what do you do?

Retailers like Marc Charest of R&D Seafood in Woonsocket, R.I., say they rely on their wholesale operation to even out the inventory issue. The family-run business has a retail seafood store and sells wholesale to restaurants in the area.

“We don’t have an overstock problem,” he says, “because we just move more product through wholesale.”

Sasso, Caluya and Charest also turn to their wholesale foodservice customers for keeping retail inventory in balance, as does Cantu at Quality Seafood.

“We mostly buy for wholesale and then put some upfront for retail sale,” Cantu says.

Depending on the species, shelf life within the retail case can typically range from one to three or four days. Caluya says if product doesn’t sell after two days, he will offer it to his restaurant customers who will prepare it for use that night.

Other retailers use excess product for their own value-added operations. Steve Holbrook, seafood director at The Hills Market in Columbus, Ohio, says just about any steak fish, such as tuna or swordfish, works well as a marinated item sold in the prepared-foods section, as do stuffed items such as sole. Holbrook says he works with the store’s chef to help move overstocks.

In addition, he says, he has a vacuum marinator in his department that he uses for marinating fish that is then frozen in vac-packs and sold.

Cantu notes Quality Seafood also has a kitchen that features a different grilled item every day.

“So if we are a little long on something, we sell it from the kitchen,” he explains. Quality’s best-sellers include catfish, drum, farm-raised and wild salmon and tilapia.

In Stuart’s Seafood’s prepared foods section, Sasso says she uses overstocked product to develop new and interesting recipes, such as zucchini-and-crab chowder or different seafood and fish cakes.

Besides using up the excess inventory, Sasso says the fish soups and cakes “are good ways to introduce customers to different products.”

Moving product through sales and markdowns is another method used by some retailers. Caluya says product that doesn’t sell in the first day or two is put on special, typically for $1 over the price at which he bought it, but sometimes at below cost.

“I’d rather have customers have nice fish than throw it away,” he notes.

Both Caluya and Sasso also freeze surplus fish for sale as soup and stew ingredients. A fish that would ordinarily sell at $8.99 a pound is frozen and sold at $5.99 a pound, says Caluya. It becomes a good deal for customers, he says, and keeps his freezers from filling up.

Sasso says she’ll sell frozen fish for use as an ingredient, but not as an entrée. And leftover squid, she notes, can be sold as bait to the resort area’s fishing population.

Donations are yet another way that retailers have cleared their cases of overstocks.

“We do make donations,” says Sasso, “but mostly to the local animal population.” An operator of a shelter for 200 feral cats will take leftover seafood, she says.

Caluya has donated to local meal sites in the past, although he says health department concerns over E. coli contamination may make it harder to donate fresh product directly to an organization.

Rather, he says, it’s best to work through the area food bank or through a wholesaler and deal only in frozen product.

The range of options for dealing with overstocked seafood are many and varied, but the key for most retailers is to plan their buying carefully, so too much product isn’t a daily occurrence. 

April 2012 - SeaFood Business 

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