When people say a store has a "shrink problem," that can hide the real issue.
Shrink is an outcome. The cause may be very different from one department to another.
Possible causes include:
- spoilage,
- poor rotation,
- over-ordering,
- inaccurate receiving,
- invoice errors,
- unrecorded markdowns,
- damaged product,
- incorrect production,
- scanning or pricing errors,
- theft,
- cash-control failures,
- bad inventory counts,
- product being used internally without being recorded,
- or simply ordering more than the store can sell before quality declines.
That matters because the solution depends on the cause.
More security cameras will not fix produce being ordered too heavily.
A tighter ordering routine will not fix receiving shortages that are never documented.
A cycle count will not fix a department that is producing twice as much prepared food as it can sell.
Before trying to "reduce shrink," it helps to ask:
- Where is the loss concentrated?
- When does it happen?
- What process touches the product before the loss appears?
- What information would confirm the suspected cause?
- What one control could we test first?
The goal is to stop treating shrink as a mysterious percentage and start tracing it back to behavior and process.
Where have you found the biggest hidden source of shrink in a grocery store?