How to set up expiry date, lot and shelf life tracking
Who it is forGrocery chain branch and warehouse teams, category management, quality and loss prevention
Expiry management is the only thing standing between shrinkage and a penalty in food retail. An out-of-date product on the shelf is not just an economic loss but a direct regulatory issue. Yet in most businesses date tracking is done by eye on the shelf with no equivalent in the system. This guide covers how to build lot-level records, how to apply FEFO and how to set markdown thresholds.
Shelf life, use-by and best-before
The three concepts are frequently confused and the confusion has legal consequences. Shelf life is the period over which the product retains its quality from production, established by the manufacturer through testing.
A use-by date applies to products that can spoil microbiologically: raw meat, fresh milk, prepared salads. After that date the product cannot be consumed and cannot be sold; selling it is prohibited.
A best-before date is the last date on which quality is guaranteed. After it the product loses quality but carries no health risk. Regulation permits such products to be sold under specific conditions — in a separate area, with the passed date clearly stated.
| Concept | What it states | After the date | Example product |
|---|---|---|---|
| Shelf life | Total period from production | A duration, not a date | All packaged food |
| Use-by date | The last day of safe consumption | Sale prohibited, product destroyed | Raw meat, fresh milk, salads |
| Best-before date | The last day quality is guaranteed | No risk, quality declines | Pasta, canned goods, biscuits |
Hold the two date types in separate fields in the system. Held in one field, a product that would only lose quality gets destroyed unnecessarily, or one that should be destroyed stays on the shelf.
Lot-level stock: one product, many batches
Date tracking presupposes stock held at lot level. In a conventional stock record a product has one quantity: "120 tubs of yoghurt". Under lot-level records that same product sits as separate batches, each with its own date.
Without that separation no date rule can be applied. If the system does not know which goods expire when, it can neither raise a warning nor pick the right issue.
Lot recording begins at goods receipt. A lot number and date are entered for every batch received; where GS1-128 barcodes are used that data comes in a single scan, and where they are not it is keyed. Keying is slow, but the alternative is having no date tracking at all.
FEFO: the rule that governs issue order
FIFO — first in, first out — is the default rule of general inventory management, but it is not sufficient in food. The goods that arrived first are not always the goods that expire first: batches from different suppliers or with different production dates break that order.
The correct rule is FEFO: first expired, first out. In warehouse dispatch, shelf replenishment and deli counter preparation, the issue always comes from the batch with the nearest date.
FEFO breaks down in two places. The first is shelf replenishment: staff put the new arrivals at the front because it is easier. The second is warehouse picking: the picker takes the most accessible carton. Neither is solved by the system but by layout and training — the system says which lot to take, arranging the space is the business's job.
- Remaining shelf life (days)
Expiry date − Today- Remaining shelf life ratio
Days remaining ÷ Total shelf life × 100
- Record lot and date at goods receiptEach batch is entered as a separate line. Two batches of the same product with different dates are not merged into one line.
- Lay out the warehouse by dateDifferent lots of the same product are stacked front to back rather than side by side; the one at the front is always the nearest-dated.
- Produce pick lists at lot levelThe pick list gives a lot number, not a product name. The picker does not choose which carton to take; they read it from the list.
- Rotate on shelf replenishmentNew arrivals go behind, older stock is pulled forward. This step is not followed unless it is audited; it belongs on the daily checklist.
- Monitor remaining shelf lifeDays remaining and remaining shelf life percentage are calculated for every lot; those crossing thresholds drop onto the relevant lists automatically.
Goods receipt thresholds and markdown triggers
Date management starts at goods receipt, not on the shelf. A product arriving with half its shelf life already gone is a shrinkage candidate the moment it enters the store, and that is the supplier's problem.
So a remaining shelf life threshold is applied at receipt: if a product arrives with less than a set proportion of its total shelf life, it is not accepted. The common threshold is 70 per cent, set higher for short-life products and lower for long-life ones.
At the other end sits the markdown trigger. When remaining shelf life falls below a set threshold the product goes onto the markdown list automatically. Threshold and discount depth are written in advance by category; the decision is not made in the moment, because decisions made in the moment are made late.
| Category | Total shelf life | Receipt threshold | First markdown | Second markdown |
|---|---|---|---|---|
| Fresh dairy | 7-21 days | 80% remaining | at 30% remaining | at 15% remaining |
| Meat and poultry | 3-10 days | 85% remaining | at 40% remaining | at 20% remaining |
| Delicatessen | 20-60 days | 70% remaining | at 25% remaining | at 12% remaining |
| Bakery | 1-3 days | Same day | 4 hours before close | 1 hour before close |
| Ambient grocery | 6-24 months | 70% remaining | at 20% remaining | at 10% remaining |
| Personal care | 24-36 months | 75% remaining | at 25% remaining | at 12% remaining |
Delay the markdown decision and there are no options left. A product sold at 30 per cent off generates cash above cost; one that is destroyed takes the whole cost with it and adds a disposal charge on top.
Being ready for a recall
The most critical function of lot tracking shows up not in daily operations but at the moment of a recall. When a supplier recalls a batch there is one question: which stores received how many units of that batch, and how much of it has sold.
In a system with lot-level records that answer arrives in minutes. In a system without them there is no answer, and the only option is to pull the entire stock of that product — multiplying the cost of the recall many times over.
Readiness has three parts: tracking the lot from goods receipt to the shop floor, holding lot data in the sales record, and rehearsing the recall scenario once a year. An untested traceability chain breaks at the moment it is needed.
- The lot must be traceable without a break from receipt to the shelf
- Lot data must travel with inter-store transfers rather than being reset
- Run a recall drill annually: pull the full movement history of one chosen lot
- Disposal records must carry lot number, quantity, date and reason
Frequently asked questions
- What is the difference between shelf life and expiry date?
- Shelf life is the total period over which a product retains its quality from production. The expiry date is the calendar day on which that period ends. Separately, a use-by date and a best-before date differ: selling is prohibited after the first, while after the second only quality declines.
- What is FEFO and how does it differ from FIFO?
- FEFO means the batch expiring first goes out first. FIFO means the batch received first goes out first. Goods received first are not always the ones expiring first; batches from different suppliers break that order. In food the correct rule is FEFO.
- How is expiry date tracking done?
- Stock is held at lot level: different-dated batches of the same product sit on separate lines. The lot number and date are recorded at goods receipt, issues follow FEFO, and batches crossing the remaining shelf life threshold drop onto the markdown list automatically.
- How much shelf life should remain at goods receipt?
- The common threshold is 70 per cent of total shelf life, set higher for short-life products: 80 per cent for fresh dairy, 85 for meat and poultry. Goods below the threshold are not accepted; accepting them transfers the shrinkage risk from the supplier to you.
- When should a product approaching its date be marked down?
- An example ladder: the first markdown when remaining shelf life falls to 25-30 per cent, the second at 12-15 per cent. The thresholds should be written in advance by category; a decision taken in the moment is always taken late and the product ends up destroyed.
- Why is lot tracking necessary?
- It is the only way to know, at the moment of a recall, which batch went to which store and in what quantity. A business without lot tracking has to pull the entire stock of a product rather than a single batch, and the cost multiplies many times over.