Shrink, when used in the context of retail stores/businesses, is defined as the loss of product between the supplier and point of sale. When the difference between a profitable and non-profitable business is just a couple percent, you need all the help you can get. Having the extra burden of shrink is something that many retail businesses are unable to deal with.
If you sell groceries or any perishable food products at your retail store, you’ll want to keep them moving as fast as possible. Allowing these items to remain on the shelves for long periods of time increases the chance of them reaching their expiration date. Once a food product reaches its expiration date, the store can no longer legally sell it; thus, you’ll be forced to throw it away and accept it as part of your store’s shrink.
There are a couple of ways to move food products, one of which is to offer discounts and special promotions. If a product isn’t selling as quickly as you’d hoped for, try placing a special sale sign over it while offering customers a discount. People love to buy products at a discount, and this will likely help you get rid of it faster.
Studies have shown that as much as 60% of all shrink comes directly from employee theft. It’s not something retail store owners want to think about, but turning a blind eye to the potential for employee theft can cost a retail store big bucks. To help prevent this from occurring, make sure there cameras set up in both the front and back of your store. Don’t try to hide them, but instead keep them out in the open so your employees will see them. Just the thought of having their actions caught on camera should dissuade employees from lifting product.
Investing in employee background checks can also discourage theft, and subsequently lower shrink rates. Store owners should hire a background screening company to pull the records on both new and existing employees, looking for arrests related to shoplifting/theft. If a job candidate was previously arrested on charges of theft, you might want to think twice before hiring him or her. Check out our previous blog post titled Five Ways To Prevent Employee Theft for more tips.
Customer theft is also a concern that retail store owners face. Contrary to what some people may believe, there is no retail industry that’s completely safe from customer theft. Whether it’s fashion clothing, jewelry, electronics, groceries or just a convenience store, theft is going to happen. There are some ways for store owners to discourage customer theft, however, such as investing in security tags, video monitoring systems, hiring additional employees, and placing valuable products glass counters.
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