PLU vs SKU Number: What’s the Difference?

What’s the difference between PLU and SKU? In the world of retail and inventory management, you must stay organised. That’s where codes like PLU and SKU come into play. While both help businesses manage products efficiently, their purposes and applications differ significantly. If you're a small grocery store owner or running a multi-store retail business, knowing these codes is vital for smooth operations.

Let’s dive into what these codes stand for, how they work, and why they’re indispensable in modern retail.

What is PLU?

PLU stands for Price Look-Up. It’s a numerical code system primarily used for grocery stores to identify fresh produce and bulk items. PLUs help cashiers and self-checkout systems quickly determine the type of item and its price. International Federation for Produce Standards (IFPS) administered the code.

Characteristics of PLU Codes:

1. Numeric Format: PLU codes consist of 4 or 5 digits.
2. Used for Produce and Bulk Items: They’re commonly found on items like apples, bananas, and nuts.
3. Standardized Globally: Managed by the International Federation for Produce Standards (IFPS), ensuring uniformity worldwide.
4. Organic or Conventional: Codes starting with "9" indicate organic produce, while those without this prefix are conventional.

Examples of PLU Numbers:

• Bananas: 4011 (regular), 94011 (organic)
• Avocados: 4225 (Hass Avocado)
• Carrots: 4562 (Loose Carrots)

Why PLU Codes Matter:

• Efficiency at Checkout: Cashiers don’t need to memorise every product's price; PLUs provide instant information.
• Global Consistency: A bag of oranges in Australia will have the same PLU code as one in Canada.
• Differentiation: Helps distinguish between similar items, such as organic and non-organic products.

What is SKU?

SKU, or Stock Keeping Unit, is a unique alphanumeric code businesses create to track inventory. Unlike PLU codes, SKUs are customisable and specific to each company. They’re often used across retail, e-commerce, and warehouse operations to identify, track, and manage products.

Characteristics of SKU Codes:

1. Business-Specific: Each retailer designs their SKU codes based on their inventory needs.
2. Alphanumeric Format: A combination of letters and numbers is often used for better organisation.
3. Detailed Information: SKUs often include details like colour, size, style, or model.
4. Applicable to All Inventory: From electronics to apparel, every product can have an SKU.

Examples of SKU Numbers:

• Tshirt-BLK-M: Black T-shirt, Medium size.
• Laptop-Dell-XPS15: Dell XPS 15-inch Laptop.
• Shoes-NIKE-RUN-BLU42: Nike Running Shoes, Blue, Size 42.

Benefits of SKU Codes:

• Accurate Inventory Management: Keeps stock levels in check.
• Sales Insights: Identifies fast-moving products.
• Streamlined E-commerce: Critical for order fulfilment and tracking.

PLU vs SKU: What Sets Them Apart?

While both PLU and SKU codes serve to organise and streamline business operations, their purposes and applications differ significantly. Here's a detailed comparison:

Imagine a retail chain selling fresh oranges and packaged orange juice.

• The oranges would be assigned a PLU code (e.g., 3107).
• The orange juice would have an SKU number created by the retailer (e.g., OJ-500ML-BRANDX).

When to Use PLU or SKU Codes

Choosing between PLU and SKU depends on the nature of your business and the type of products you sell.

Ideal Scenarios for PLU Codes:

1. Grocery Stores: For fruits, vegetables, and other fresh produce.
2. Bulk Sales: Items sold by weight or volume, such as nuts or grains.
3. Quick Identification: Simplifies differentiating organic vs. conventional produce.

Ideal Scenarios for SKU Codes:

1. Retail Stores: For tracking stock in clothing, electronics, and more.
2. E-commerce Platforms: Facilitates online order tracking.
3. Warehousing: Monitors inventory levels and locations efficiently.
4. Product Variations: Tracks differences in size, colour, or style.

Why Businesses Need Both PLU and SKU Systems

For businesses dealing with both fresh produce and packaged goods, using both PLU and SKU systems offers comprehensive inventory control.

Key Benefits of Combining Both Systems:

1. Improved Efficiency: Reduces manual errors with pricing and stock tracking.
2. Customer Satisfaction: Support faster checkout and accurate billing.
3. Comprehensive Data: Tracking fresh and packaged items under one system.

Implementing PLU and SKU in a POS System

Modern point-of-sale (POS) systems support both PLU and SKU codes, offering seamless integration. Here’s what to look for:

1. Customisable SKU Creation: Allows businesses to design SKU codes tailored to their needs.
2. Preloaded PLU Database: Offers standardised PLU codes for quick setup.
3. Real-Time Updates: Reflects inventory changes instantly after each sale.
4. User-Friendly Interface: Simplifies training for employees.

Example of Integration:

A grocery chain uses PLU codes for produce and SKU codes for packaged goods. Their POS system connects the two, ensuring that all sales are recorded accurately and stock levels are updated in real-time.

Common Challenges and Solutions

Challenge 1: Misidentification at Checkout

• Problem: Cashiers may enter the wrong PLU code, leading to pricing errors.
• Solution: Invest in barcode scanners or automated systems that recognise PLU stickers.

Challenge 2: SKU Overload

• Problem: Businesses with vast inventories may struggle to manage thousands of SKUs.
• Solution: Use inventory management software to organise and search SKUs efficiently.

Challenge 3: Integration Issues

• Problem: Synchronizing PLU and SKU data across multiple systems can be challenging.
• Solution: Choose a POS system that supports multi-channel integration.

SKU Tracking: The Game-Changer

SKU tracking is more than just stock management—it’s a tool for business growth.

How SKU Tracking Helps:

1. Identifying Trends: Know which products sell best and plan restocking accordingly.
2. Preventing Stockouts: Alerts for low stock ensure you never miss a sale.
3. Optimising Storage: Helps organize warehouses for quick order fulfilment.
4. Reducing Waste: Avoid overstocking items that don’t sell well.

Example of SKU Tracking in Action:

An online clothing store uses SKUs to monitor the popularity of different sizes and colours. When a particular size runs low, they’re alerted to reorder before it’s sold out.

PLU in Everyday Life

While SKUs dominate e-commerce and retail, PLU codes remain a cornerstone of grocery businesses. Next time you’re at the store, take a closer look at the small stickers on your fruits and vegetables—they’re more powerful than they seem!

Fun Fact:

The PLU system has been around since the 1990s and is now used in over 50 countries worldwide.

Final Thoughts

PLU and SKU codes are essential tools for any business dealing with physical products. PLU codes make fresh produce sales straightforward, while SKUs provide detailed insights into broader inventory. By leveraging both systems effectively, businesses can boost efficiency, make customer experiences better, and make data-driven decisions.

Whether you’re running a local grocery store or managing a global retail chain, mastering these codes is a step toward operational success.

More Resources:

Tips to Improve Retail Store Operations

Tips to Improve Customer Satisfaction in Retail

How to Find Trending Products for Your Retail