Grocery store shrinkage, or shrink, is a term that refers to the loss of inventory. According to a 2011 study by the FMI and The Retail Control Group, 64% of shrinkage can be blamed on lack of training, inadequate practices, and inefficient store operations. Only 36% of shrinkage is the result of dishonest behavior and theft.
Luckily, there are steps that grocery stores can take to reduce shrinkage and address issues of inadequate procedures and operations.
How to Eliminate Grocery Store Shrink
Self-checkouts often rely on the honor system. As customers scan their items, they may be asked to input product codes for their produce. Without proper monitoring, some may enter product codes for low-cost items instead of the correct codes for the more expensive produce they are actually purchasing. In some cases, this may be a simple mistake on the part of the customer, especially if the products look essentially the same, the only difference being that one is organic and one is not. In other cases, the customer may be deliberately dishonest in an attempt to save money. Either way, this costs stores money.
The solution to this issue is better monitoring by managers. A tech-savvy manager can stand at a podium and verify merchandise by looking at multiple register screens at once and view the actual items the customers are purchasing. If an error occurs, the employee can take steps to ascertain the issue with the help of the store’s video footage.
Untrained cashiers can make the same mistakes customers make in the self-checkout line. They may not realize they are holding organic tomatoes and may enter the product code for the low-cost version of the product. For stores on perpetual ordering systems, this may also trigger an incorrect order and potential shortage of the organic tomatoes. Again, this costs the store money.
Another example is to train cashiers to check for “BOB,” or Bottom of the Basket. Customers can easily forget larger items placed on the bottom rack of the cart and leave without having paid for them. Having cashiers keep an eye out for these items can help prevent potentially high-dollar items from walking out the front door.
Implement price reductions
Produce doesn’t last forever. Over time, fruits and vegetables will develop soft spots and blemishes as they ripen. Instead of throwing these items away, produce managers should consider alternatives. If the products are still marketable, reducing their price may encourage shoppers to buy them. If they are past their sell-by date, but still good, the store’s bakery or deli may be able to use them, as well.
To reduce inventory shrinkage at your grocery store due to shoplifting, the first thing you need to do is identify the high-risk areas. These are typically in quiet corners or areas with tall shelves where video surveillance is interrupted by limited visibility. Once you’ve identified these critical zones, position employees in these areas at various times during operational hours. While the employees may spend much of their time stocking shelves, their presence alone may be enough to deter would-be shoplifters from looting your inventory. Stores can also implement various shelving solutions aimed at preventing fraud, including those that only release a single-unit at a time or sound an alarm when a shelf is “swept” clear of all inventory in a split second (likely into a purse or jacket).
Lower the amount of shrinkage your grocery store experiences by addressing the most common issues that cause it, such as shoplifting and poor training.