We understand that having out-of-stocks is extremely frustrating for you, especially when such products are advertised.

In Grocery, the more significant issues that we face are:

• Forecasting: Following the acquisition, we had to integrate our systems resulting in changes to tools and processes.  People needed to be retrained.  Our RSCs were consolidated which led to logistical issues.  All of this led to shortages on our shelves.  We continue to work hard to improve the collaboration between our Buyers, our Category Managers and our Vendors.
• Delisted items: In some cases, stores are ordering delisted or seasonal items that are no longer available.  We are working very hard to update our POGs (Planograms ) and getting better at communicating our delists to the stores.
• Vendor shortages: We are experiencing a number of problems with vendor shortages that are higher than usual.
• Frozen Food was a major issue a couple of months ago when we consolidated several of our frozen RSCs. Our service levels are recovering although we are still not where we need to be.

In the case of Fresh:

• Our produce service levels have been challenged by the growing conditions in California, which have been worse this year than in previous years.
• The supply of beef has been very tight so, if the stores sell more than forecasted, we run into problems getting replacement stock. Even if we find product, our standard of 21 days of aging means that we likely can’t ship it even if we have it.

In warehousing, we have made a significant investment in leading-age technology at our Rocky View warehouse. This warehouse is one of the most sophisticated and smart warehouses in the country and will position us well in the future.

So, while it is true that we are still experiencing problems with out-of-stocks, we are happy to hear that the stores are reporting progress every week. As time goes on and our people become more familiar with their new systems, tools and processes, we will continue to see improvements in our stock levels in our stores.  This is a priority for us and it will continue to receive the highest level of attention and focus it deserves.