Waitrose will next month begin rolling out new forecasting software to accurately predict customer demand after early trials delivered benefits worth millions of pounds.

The supermarket chain will replace its bespoke stock systems because of failures to predict demand during promotions and special events, such as Christmas.

The old software reacted only to past events, leading to lost sales, customer dissatisfaction and wasted stock, says Waitrose forecasting systems manager Matthew Hallett.

'The challenge for any supermarkets is knowing what a customer wants to buy before they buy it, when even they do not know exactly what it is they will buy until they get to the store,' he said.

Waitrose began trialling SAS software to calculate sales and forecast demand for more than 25,000 products at each store.

The retailer ran an initial three-month pilot in parallel with existing systems at five stores before a live trial across several stores from June to December 2006.

'We needed to fine tune some of the forecasting measures to prove to the board that it could deliver bottom line benefits,' said Hallett.

The second trial was run over Christmas, testing the software in the company’s busiest period, says Waitrose order systems manager Gail Richmond,.

'We were able to examine sales, stock, wastage and how often orders were amended by store managers and compare it across the company,' she said.

'We generated benefits worth millions of pounds, including increased sales over Christmas and reduced wastage of as much as 20 per cent.

'We also halved the number of changes made by managers, which shows it is working.'

Waitrose plans to roll the system out to all its 184 stores by September.