Jul 07, 2011
Five Sources of Produce Shrink Every Grocer Should Monitor
By Karen VanBrunt
Global retail shrink in 2010 reached $107.284 billion, according to the Centre for Retail Research’s annual Global Retail Theft Barometer (GRTB) — down -5.6 percent over the previous year as retailers put nearly 10 percent more funds into security and loss prevention. In the U.S., internal error and administrative failure counted for a substantial 16.9 percent of losses, or $18.1 billion.
For grocers, a healthy portion of that $18.1 billion loss can be traced back to operational errors, such as those that occur when produce scale PLU items are handled at POS. All too often, these items are not calculated accurately into the customer’s order, resulting in substantial shrink.
Below are five key areas that grocers should monitor to stay ahead of produce shrink:
1. PLU Entry
2. Weighing vs. Counting
3. Weighing by the Cashier
During weekly/monthly tests, have the CSM process an order to get an accurate total and then ask each cashier to process the order as they normally would. Direct observation and video data can then be used to discover flaws when the two totals do not match.
4. Weighing by the Customer
5. Improper PLU
Special analysis should be conducted on the top five PLU’s –bananas, pinto beans, and so on. Doing so will identify transactions where PLU numbers are being abused. Note that these types of transactions will not flag on any internal report that is run because they simply look like “sales.” However, video synchronized with data will identify these types of fraud cases.
Oftentimes, when a red flag alert comes up, the self-checkout station manager will simply clear it without investigating the situation. Managers should investigate why the alert occurred before clearing it. Was an extra item placed into the bag without being scanned? Was the proper PLU used? Auditors equipped with item and transaction-level video can also run queries on common fraud targets like shrimp and meat. Quickly scanning through video clips of ground beef sales, for example, will help you catch the meat associate who tagged T-bone steak as ground beef.
In a world of increasing technological complexity, both new threats and new solutions arise regularly. Grocers who consistently train their employees and monitor their stores, employees, and customers will reveal new patterns of fraud and operational shrink and will be the ones to benefit from, and despite of, these ongoing changes.
You can learn more about the author, Karen VanBrunt, who is the director of professional auditing services for Agilence Inc., by clicking here.
570 Lake Cook Rd, Suite 310
Deerfield IL 60015
Convenience Store News
CSNews Supplier Guide
CSNews for the Single Store Owner
Private Label ⇒ Store Brands
Independent Grocer Network
The Gourmet Retailer
Directory of Convenience Stores
Hispanic Retail 360
|© 2014 Stagnito Media. All rights reserved.|