LAS VEGAS — The best way for food retailers to reduce shrink, theft and fraud levels is to ingrain loss prevention practices into the everyday culture of their stores, said Tim Bartkowiak, director of loss prevention and security for Spartan Stores, the combined retailer-wholesaler based in Grand Rapids, Mich.
“You want a loss prevention culture where honesty is valued and dishonesty is not tolerated,” he said. The absence of such a culture “will have a negative impact on your store.”
Similarly, retailers need to create a “safety culture” to prevent accidents among shoppers and employees in their stores, noted Bob Brokaw, corporate safety director, Supervalu, Minneapolis.
These executives outlined their approach to improving store practices last month at the Food Marketing Institute/Marketechnics Show here during a session called “Let's Walk the Store With a New Perspective.”
The first principle for engendering a loss prevention culture is to create “the impression of control” to modify behavior in stores, Bartkowiak said, likening it to police cars situating themselves in a few “hot spots” along the highway. “Just by being there, the police modify your driving behavior, causing you to slow down.” The same, he said, applied to the effect of sound store policies on employees.
Loss prevention policies should be introduced to employees at their orientation after being hired. “Tell them your expectations,” Bartkowiak said. “You want folks on the straight and narrow from day one.” Good performers should be recognized, he added.
On an ongoing basis, retailers should have periodic “shrink meets” with employees to discuss “what they can do to impact shrink,” he said. This would include discussing how policies could be improved or adjusted. Retailers should also make a 24-hour hotline available to employees who want to voice an opinion confidentially.
He also encouraged retailers to make “night audits” of stores. “You'd be amazed to see what the culture is like at 10 p.m. for a 24-hour store when there are three to five associates and a stock crew,” he said. “They want to know how they're doing, too.”
Among the technology tools used to prevent shrink, Bartkowiak highlighted TV cameras, electronic article surveillance (EAS) and POS exception reporting. “Talk about EAS with associates, and make sure they know how to address alarms and stop someone appropriately.”
POS exception reporting, used to identify unusual patterns at the POS, should be positioned as a “positive tool to help cashiers offer better customer service,” besides being a system that detects fraud and theft, he said. “People want to improve, so we use it to make them better.”
Bartkowiak also pointed out that inventory practices can also affect shrink, such as ordering that leads to out-of-stocks or overstocks.
When a particular store is found to have significant shrink issues, it is given “code red” status, said Bartkowiak. “We pay special attention to that store,” he said, adding that a code red document available online explains what the store should be doing to improve.
In one case, a store with $80,000 in shrink was put on code red for 90 days. “They didn't like the attention, but the next inventory period they were No. 1,” he said.
The policy works so well that now Spartan puts one store every quarter on a code red footing even if it doesn't need it. “We do it to make them the best of the best,” he said.
As with loss prevention, to create a store culture that emphasizes safety, retailers should integrate safety “into all processes on a day-in, day-out basis,” Supervalu's Brokaw said. “If it's stand-alone, it's the last thing you get to.”
Like Bartkowiak, Brokaw said it is up to store management to emphasize safety procedures and expectations with new hires. Whenever managers communicate with employees about operations, “safety should be one of the topics,” he said, adding that safety-minded employees should be recognized.