In a recent 8th & Walton “3‑Minute Insights” post, industry veteran Heather Reid explains a crucial distinction that many suppliers to Walmart often misunderstand: the difference between “demand forecast” and “order forecast.”
What’s the difference?
- Demand Forecast — This reflects actual consumer sales: what Walmart customers are likely to purchase in stores over a given period. It’s a forward-looking projection based on historical sales data, seasonality, promotional cycles, and consumer demand patterns.
- Order Forecast — This represents what Walmart plans to order from suppliers before issuing a formal purchase order. It considers current inventory levels, inbound shipments, and logistical constraints like minimum order quantities or packaging sizes.
Because of these different inputs — one based on consumer demand, the other on supply‑chain logistics — the two forecasts almost never align exactly. Heather uses a helpful analogy: it's like planning a dinner party (demand forecast — how many meals you expect to serve) versus going shopping (order forecast — what you actually buy considering what’s already in your pantry and what you need to buy).
Why it matters for suppliers
Suppliers who focus only on the order forecast risk missing the full picture. While order forecasts signal what Walmart intends to order, demand forecasts expose underlying trends — such as rising consumer interest, seasonal surges, or the impact of promotions.
By monitoring both demand and order forecasts, suppliers can better anticipate sales spikes, avoid stockouts or overstock, and align production and packaging choices accordingly. This comprehensive understanding supports smarter inventory planning, better fulfillment, and stronger retailer relationships.
