LAS VEGAS -- Reducing shrink isn't the end result of efforts in various store departments, but is the by-product of a company-wide commitment to training, controls and information, retailers told independent operators at the National Grocers Association's Supermarket Synergy Showcase 2004 here.
Mike Beal, chief financial officer of Balls Food Stores, Kansas City, Kan., said shrink reduction needn't be complicated. However, it does require the implementation of many simple processes backed by a corporate commitment. Combined, these operational elements are the best plan to fight shrink
"If you don't have a corporate commitment around shrink, you're never going to realize your potential to control it," Beal told conference attendees. He recommended that retailers assign a corporate executive to be in charge of company-wide efforts to reduce shrink and create a culture around it.
"Give him the authority to get things done," he said. "This person shouldn't be a clerk moving up or a guy with a desk job getting extra responsibility."
Balls, which operates 30 stores between the Hen House and Balls' Price Chopper banners, strives for consistent practice on shrink control in each of its stores. "If your shrink pro cedures differ from store to store, they better have a good reason to," Beal cautioned.
Employee training, using proper measurement techniques, and ongoing maintenance of a store's shrink program should also be priorities, he said.
One of the common problems supermarkets encounter in attempting to control shrink is that they often have difficulty knowing just how much shrink currently exists. Beal urged retailers to get better data and to use the data they have more effectively, asking, "How do you improve something you can't measure?"
For example, stores that log spoilage in the produce department are measuring shrink, but Beal noted, "aren't doing any good until they show the guy out on the floor what it means to throw stuff away." He also suggested supplementing shrink data by looking at it from different angles, such as comparing tonnage that goes in the back door with what comes out the front door, or calculating ad markdowns.
In Center Store, such practices might apply to the commercial bakery aisle.
Training offers opportunities to reduce shrink that many retailers overlook, Beal added. Produce managers, for instance, can leave an unusual fruit or vegetable by the time clock so that cashiers recognize it. Clerks can be taught to open cases without damaging product, and produce workers should know how to properly hydrate vegetables on display. "Training affects more aspects of your business than you realize," Beal said.