Are your shelves suspiciously empty? Do you find yourself constantly throwing away wilted produce? Are your sales numbers way behind where they should be?
If these problems sound familiar, you might be dealing with shrinkage.
Left unchecked, shrinkage will clear out your grocery store’s shelves, eat into your profits, and frustrate your customers.
While shrinkage is an unfortunate reality in the grocery retail industry, the good news is that you don’t have to let it run rampant. In this blog, we’ll explore how to set and accomplish grocery store shrinkage goals in five essential steps.
What Should Your Grocery Store Shrinkage Goal Be?
Before you can roll up your sleeves and start eliminating shrink, it’s time to set some goals.
First, you need to know how shrinkage affects your grocery store’s bottom line. Consult your point of sale (POS) system’s shrinkage report to determine how much product and how many sales you’re losing to issues like theft and spoilage.
Most grocers report losing an average of 1.7 to 3.1% of their inventory, but it’s important to note that shrinkage can vary wildly by department. For example, thieves may target your meat and cheese coolers while avoiding your cereal aisle, and you’ll likely see more expired products in your perishable departments than any others.
That’s why you should set department-specific goals alongside your overall grocery store shrinkage goal.
Now that you have somewhere to start, let’s take a look at some specific strategies to accomplish your grocery store shrinkage goals.
1. Brush Up on Your Grocery Inventory Management Skills
The best precaution you can take against grocery store shrink is a foolproof inventory management strategy.
Knowing what you have in stock at any given time is key for spotting spoilage and waste before they make a major dent in your bottom line, so make sure you have a system to monitor your inventory in real time. Your best bet is to invest in a POS system that follows each item in your grocery store from the stockroom to the checkout counter.
By keeping a close eye on your POS system’s inventory records and sales reports, you can easily identify discrepancies and take action when you notice an uptick in shrinkage due to theft or spoilage.
2. Investigate Where Your Grocery Store Shrink Is Coming From
The next step to achieve your grocery store shrinkage goal is to discover why you’re losing product and sales. Shrinkage is a complex issue caused by several factors, including:
- Spoilage, which occurs when an item expires before it’s purchased
- Shoplifting, which can occur on the sales floor or at your self-checkout stands
- Internal theft, which occurs when your employees steal product or money from your store
Identifying which type of shrinkage happens most frequently in your grocery store will help you decide on your next steps.
3. Tackle Spoilage and Waste
If you frequently find yourself throwing away wilted produce or scouring the shelves for items past their expiration date, you might have a waste problem on your hands.
Spoilage can be detrimental to your grocery store’s bottom line, with every product you throw away becoming a wasted investment. Along with the financial hit, excessive waste takes a toll on the environment and can hurt your business’ reputation as a local, sustainable place to shop.
Fortunately, there are a few simple strategies you can use to limit waste:
- Use a first in, first out (FIFO) approach when stocking to ensure your oldest items sell first
- Label products clearly with their package and expiration dates
- Offer a discount on items nearing their expiration dates
These strategies can help you achieve your grocery store spoilage goals while offering your customers the freshest food in the neighborhood.
4. Stop Thieves in Their Tracks
Shoplifting can also be a major source of grocery store shrinkage.
If you suspect that shoplifters are lurking in your store, it’s best to be proactive. Train your employees to circulate the sales floor and offer friendly service to all your shoppers. Remember, excellent customer service is one of the biggest deterrents to thieves.
You might also consider investing in a combination of real and decoy security cameras to place in key spots around your store, including in your highest-theft departments, above your checkout area, and near your entrance and exit. To further deter thieves, use signage to indicate that your store is protected by security cameras.
5. Leverage Your POS System’s Security Features
Your POS system is a powerful tool. It processes sales transactions, manages your customer loyalty program, and keeps tabs on almost everything happening in your store.
But what you might not know is that your POS system is your most valuable partner in accomplishing your grocery store shrinkage goals.
Along with monitoring your inventory and providing in-depth shrinkage reports, your POS system should have built-in security features that let you customize your employees’ level of access to features and data, monitor their activity, and alert you when something seems amiss.
Leveraging your POS system’s security features is one of the best ways to protect your grocery store from internal theft and fraud.
Crush Your Grocery Store Shrinkage Goals With IT Retail
Now that you know how to achieve your grocery store shrinkage goals, it’s time to make sure you have the right tools.
A powerful POS system is the best defense against shrinkage. It monitors your inventory levels, identifies when and where shrink occurs, and protects your business from waste and theft.
If you’re in the market for a POS solution to streamline your grocery store operations and help you reduce shrinkage, look no further than IT Retail. With IT Retail, you can protect your bottom line and boost your sales with features like robust inventory management, a built-in customer loyalty program, and in-depth reporting.
Start your IT Retail journey today by scheduling a personalized demo with one of our grocery industry experts.
