Perishable Shrink

65% of all store shrink and 38% of total-store sales were attributed to perishable departments. The meat department contributed the highest amount of total store shrink at 18% of total store shrink or $93,414 in annual in profit loss. Produce was the second-highest shrink contributing department at 16% of total store shrink or $82,022 in profit loss.

As supermarkets continue efforts to differentiate themselves from their competition, they are learning that customer loyalty is cultivated more through perishables and people, than just dry groceries with competitive pricing. As a result, companies are increasingly focused on enhancing and expanding their perishable departments as a competitive advantage. Freshness, quality, and product availability all contribute to a strategic advantage in the competition for customers but, if not closely managed, these factors also contribute to excessive amounts of shrink and lost profit.

The top operational causes of perishable shrink are:

Ineffective ordering contributed on average 28% of shrink across all perishable departments.
Improper production planning and space allocation account for 26% of shrink losses.
Poor product rotation was the third largest contributor to perishable shrink accounting for 21% of perishable losses.
Improper scan file and or scale file control accounted for 14% of perishable product shrink loss.
Receiving errors (including poor quality of product received from the supplier) accounted for 12% of perishable shrink losses.

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For more information on best practices and shrink reduction across all departments, call 602.448.8502 or email info@wheresmyshrink.com.