High prices and poor supply chain management are driving the growth of liquidation grocery stores

The price of groceries is rising—and so is the number of liquidation grocery stores. Once considered a niche option for cash-strapped shoppers, liquidation grocery stores are now being used by a broader cross-section of Canadian society, according to reporting in Canadian Grocer. The growth of liquidation of stores like Liquidation Marie reflects broader supply chain pressures, says Yu Ma, a Professor of Marketing at McGill Desautels.

“It is a direct result of current forecasting inaccuracies,” Ma says. “It suggests traditional retailers are struggling to predict consumer behaviour post-pandemic. Once goods are in the pipe, it’s often cheaper for a brand to liquidate overstock than to pay for warehouse space or reverse logistics.” And brands are increasingly using liquidation strategically. “Instead of seeing liquidation as a failure, they see it as a recovery valve in the current economic situation.”