When it comes to unsaleables, there are several factors that can contribute to the overall numbers. One area in particular that can result in unsaleables is damaged products. According to FMI, the average annual sales for a supermarket—based on a weekly average sale of $516,727—is roughly $26,869,804. Within these numbers, the average percentage of unsaleable for a store is 2.7 percent with 4 percent of that margin directly resulting from damaged goods.
In total, the average store loses $29,019 annually to damaged goods.
The large majority of damaged products results from human error. There are many places throughout the supply chain from vendor to store shelf where damage can happen, but the actual event is usually tied to an individual having made a mistake within that process. Whether that is due to machinery or just general carelessness, the reality is that human error is likely source of the damage. While this is something that cannot be controlled in its entirety, it does open up the opportunity to improve the training of staff members to limit losses and to prevent future damaged products.
One of the most helpful things you can do to reduce damaged shrink in your store is to begin the process of tracking it. Create a log where employees note how much product was lost and identify the cause. Such a log will make it easier to ascertain emerging trend and common causes, and consequently make it easier for store managers to begin to make the changes necessary to reduce those problems.
Regardless of what shrink problems are identified, having a tracking system in place is going to make employees more conscious of the problem, and hopefully more likely to focus on efforts to minimize the damage themselves.
When focusing on reducing loss from damaged products, it is important to keep in mind that some damaged products are going to happen. Like other areas of shrink, it is inevitable. It is therefore imperative to focus on minimizing loss and using best practices.
- Better Pallet Creation
- Add easy to read weight limits to backroom shelving
- Educating employees on proper ergonomics
As pallets holding products are continuously transported, it is essential that they are built correctly to support this movement and to help minimize the chance of products being crushed or damaged in other ways. While not every store is in control of building their pallets, depending on their warehouse processes, it is one area that can greatly help lower shrink numbers.
While a lot of steps in reducing shrink come down to preventing small accidents that cost you a few hundred dollars, this is one area can prevent thousands of dollars worth of damage. Although it is a much less common occurrence, no one wants to deal with a shelf falling and bringing down with it thousands of dollars worth of inventory. A clear label with a shelf’s approved limit, along with educating employees to abide by them, is a great way to minimize this risk.
With the majority of damaged products coming from human error, we can help minimize this by teaching employees proper techniques when it comes to moving products and stocking. Additionally, proper ergonomics help our employees stay healthy in the long run, which is another benefit to our business. Check out the OSHA guidelines on proper techniques and be sure to be on the lookout for coaching opportunities with your team.