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BIG 4 Best Practice Areas
1. Sales
We always want to optimize sales. This
demand’s focus on variety, optimal on-shelf
availability, and an intense focus on fresh
item quality. Customers come to shop,
and our #1 job is to ensure they get what
they came for.
The three consequences of being out-of-
stock or selling poor quality perishables
include: a lost sale, customer having to
trade off to a similar (but not desired)
item, or worst of all, sending the shopper
to a competing store.
In summary, the tracking and managing of
variety, freshness and your optimal in-stock
condition are vital to profitable selling best
practices. Tracking and managing daily sales
at the lowest department or sub-department
level allows managers to disrupt negative or
sub-par sales trends (mid-week or mid-
period) to promote for added profitable sales.
Then, every store manager should
collaborate with their department
managers to promote one or two in-store
(non-advertised) weekly featured items
using promotional signage, displays and
CSE best practices to grow sales $1,000 per
week ($52,000 annually).
Depending upon your situation,
sales may or may not be a significant
remedy to your shrink rate, but two
things always remain true: (1) sales are
every company’s life-blood and should
be the everyday focus of operators and
merchandisers and (2) profitable sales
are every CEO’s No. 1 priority.
What does this have to do with loss
prevention?
Traditionally not much, but with 64 percent
of store shrink caused by a breakdown
in store operations best practices, if loss
prevention is to grow its value proposition
as a profit realization partner then we must
align with and contribute sales profitability
and help operations sell its way to lower
shrink loss.
Next, shifting into high gear.
2.“GetYour BIG” Every day!
Seventy-five percent of all companies we
work with have a Known Loss program.
Thirty percent of these companies have a
good, efficient and effective Known Loss
program.
Properly implemented, Known Loss can be
your portal into Profit Loss. We calculate
that Known Loss Control is the No. 1 most
failed shrink prevention program. The
source of Known Loss can most often be
tracked back to breakdowns in the efficiency
of ordering, handling, storage, production,
display and sales.
Hence, training operators in the very
best and proven practices for seeing and
proactively managing known loss and
implementing smart Known Loss control
technologies must be a top operational
imperative.
Implementing an effective Known Loss
program is the first step on the yellow brick
road to 18 percent lower shrink loss, leading
to sales and profit improvement.
What is meant by our “Get Your BIG”
strategy?
It means recording 100 percent of
known loss caused by damaged and/or
distressed products and 100 percent of any
programmed gross margin erosion. When
we see our BIG every day and understand
the mandate to be sales driven, we can
help to change the operational thinking
and behaviors associated with profit
optimization.
The difference between a weak Known Loss
program and a best practice guided Known
Loss program is 17 percent less shrink with
every dollar saved going straight to your
bottom line.
3. Smarter Ordering
Building on the concepts of the vital
role of inventory control and getting
your BIG, operators and loss prevention
professionals must think about turns, turns,
turns. Smart ordering is all about being 100
percent in-stock with full variety while
turning your inventory with minimal
associated Known Loss.
Average Shrink: 2.70%
Here’sWhatWe Know:
64%
Operations
36%
Theft
57% Preventable
22%
Ordering
14%
Cashier
Errors
13%
Rotation
6%
Receiving
3%
Accounting
5%
Scan File
6%
Damage
14%
Store &
Handling
17%
Production
Planning
& Specs
Allocations
Shrink Caused by Operations
◀ Continued from page 21
| ALABAMA GROCER
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