Instore - June 2018 - 38

OPERATIONS

Shrink prevention
by Andy Nelson

"S

hrink" (the noun, not the verb) is the
shorthand way of describing the gap
between the amount of merchandise a business thinks it has and the amount it actually
has.
In the retail food business, shrink has many
causes. According to research conducted by
the Food Marketing Institute and the Retail
Control Group, about 36 percent of shrink is
caused by theft and other "misdeeds."
That means a clear majority of shrink is
due to what the industry calls "operational"
causes. That's the kind of shrink grocery
retailers and their suppliers have some control over. Larry Miller, president of Scottsdale, Arizona-based Smart Retail Solutions,
whose job is to help companies establish
operational best practices to limit shrink,
puts it this way: "My focus isn't on catching
thieves, but on training store teams, implementing smart technologies and on profit
realization."
Operational causes of shrink include ordering, handling, cashier errors, rotation, damage, receiving, accounting, overproduction,
underproduction, unsanitary production and
failure to accurately plan or calculate inventory levels, according to FMI and the Retail
Control Group. Inefficiences and/or errors
in production planning alone account for 17
percent of all operational-caused shrink and
11 percent of all shrink.

"Store shrink loss has always been a big
problem that robs retailers of the very
blood that keeps their stores alive. And
today, the problem is more threatening
than ever before - and it's growing."
LARRY MILLER, SMART RETAIL SOLUTIONS

Companies using formal production planning processes reported 6 percent lower
perishable shrink than companies that don't.
Further shrink reduction - up to 14 percent
- is realized by companies who reported
using formal production planning methods
combined with formal "known loss" recording practices.

Innoseal's tamper-evident bag-closing system helps keep product fresh and deters people from
opening bags, both of which reduce shrink. Photo: Innoseal Systems

38 * JUNE 2018 * commissary INSIDER

On average, supermarket shrink loss ranges
from 2.6 to 3.2 percent of retail sales, Miller
says. Those numbers are "simply unacceptable" in today's competitive markets, he
adds. If stores can't get their shrink losses



Table of Contents for the Digital Edition of Instore - June 2018

Instore - June 2018
Editor's Note - Success story
CONTENTS
News - Need to know: Debates and definitions
Spotlight - By the numbers: Sweet goods
Product Knowledge - Category Update: Artisan breads
Specialty Insights - Consider: deli crackers
IDDBA '18 - Disrupt and conquer
FRESH, HEALTHY AND NEW
Cheese whizzes
Indulging with a purpose
Commissary Insider - Insight Insider: Blount Fine Foods
OPERATIONS - Shrink prevention
EQUIPMENT - Improving accuracy, food safety with portioning
PRODUCT CATEGORY SPOTLIGHT - Cookies
FRESH DESIGN
Gen Z makes way for Foodservice
Merchandising - On Display: Allergen-free baked goods
Product Trends - First to Market
Product Showcase
Ad Index
Instore - June 2018 - Instore - June 2018
Instore - June 2018 - Instore - June 2018
Instore - June 2018 - 2
Instore - June 2018 - Editor's Note - Success story
Instore - June 2018 - 4
Instore - June 2018 - 5
Instore - June 2018 - CONTENTS
Instore - June 2018 - 7
Instore - June 2018 - News - Need to know: Debates and definitions
Instore - June 2018 - 9
Instore - June 2018 - Spotlight - By the numbers: Sweet goods
Instore - June 2018 - 11
Instore - June 2018 - Product Knowledge - Category Update: Artisan breads
Instore - June 2018 - 13
Instore - June 2018 - Specialty Insights - Consider: deli crackers
Instore - June 2018 - 15
Instore - June 2018 - 16
Instore - June 2018 - 17
Instore - June 2018 - IDDBA '18 - Disrupt and conquer
Instore - June 2018 - 19
Instore - June 2018 - FRESH, HEALTHY AND NEW
Instore - June 2018 - 21
Instore - June 2018 - 22
Instore - June 2018 - 23
Instore - June 2018 - Cheese whizzes
Instore - June 2018 - 25
Instore - June 2018 - Indulging with a purpose
Instore - June 2018 - 27
Instore - June 2018 - 28
Instore - June 2018 - 29
Instore - June 2018 - 30
Instore - June 2018 - Commissary Insider - Insight Insider: Blount Fine Foods
Instore - June 2018 - 32
Instore - June 2018 - 33
Instore - June 2018 - 34
Instore - June 2018 - 35
Instore - June 2018 - 36
Instore - June 2018 - 37
Instore - June 2018 - OPERATIONS - Shrink prevention
Instore - June 2018 - 39
Instore - June 2018 - 40
Instore - June 2018 - 41
Instore - June 2018 - EQUIPMENT - Improving accuracy, food safety with portioning
Instore - June 2018 - 43
Instore - June 2018 - 44
Instore - June 2018 - 45
Instore - June 2018 - PRODUCT CATEGORY SPOTLIGHT - Cookies
Instore - June 2018 - 47
Instore - June 2018 - FRESH DESIGN
Instore - June 2018 - 49
Instore - June 2018 - 50
Instore - June 2018 - 51
Instore - June 2018 - Gen Z makes way for Foodservice
Instore - June 2018 - 53
Instore - June 2018 - Merchandising - On Display: Allergen-free baked goods
Instore - June 2018 - 55
Instore - June 2018 - Product Trends - First to Market
Instore - June 2018 - Product Showcase
Instore - June 2018 - Ad Index
Instore - June 2018 - 59
Instore - June 2018 - 60
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