Building Capability to Remove Shrink Beyond the Control of The Store Manager

by Martin Hasker, Shrinkage Operations Project Manager, Tesco UK

Building Capability to Remove Shrink Beyond the Control of The Store Manager

"I am just sick of firing amazing store managers because of their bad shrink results [the causes of which are not under their control]!" - this sentiment was the underlying inspiration for one very senior retail leader to apply for, and secure the position of head of loss prevention for a leading international grocery retailer. Once in post, this leader adopted a systematic approach to addressing both the malicious AND the non-malicious causes of losses, establishing a small team (two pizzas!) who, on a weekly basis, would review the results from the external inventory audits, identifying the variances, per sku, by exception Vs average shrink for the category, for the latest batch of stores audited.

Established now for over twenty years, this capability has helped ensure that the stores are not "booked" for the losses for which they have zero control, with the leading causes of these exceptions being set up errors on off shelf displays, mistakes on case sizes and item code errors. Where the largest errors are validated and root causes identified, the value of the losses will either be removed from the stores shrink results, allocated to other lines in the P&L, and / or be compensated for by their vendors. Without this capability, the cost to stores of their shrink is typically up to 20% greater than the first cut of the audit results. Further, with this process in place, stores are more accountable for their shrink number.

In this session, the working group will get an overview from 1-2 retailers on how they have built their capabilities, their work processes, results and their most recent learnings through COVID.

This working group meeting is for retailers, CPG's and academics only.

Date and Time

July 14th - 1pm UK Time