More Shrink Coverage
Ask any food retail executive about their most pressing operational concerns, and shrink will undoubtedly be near the top of their list. While shrink is nothing new within the industry, it has become a more pressing issue in recent years, encompassing everything from organized retail crime and theft to food waste and cybersecurity.
According to the National Retail Federation’s (NRF) 2022 National Retail Security Survey, overall retail shrink, when taken as a percentage of total retail sales in 2021, accounted for $94.5 billion in losses, up from $90.8 billion in 2020. The association found that employee and external theft, including organized retail crime, accounted for about two-thirds of those losses.
It’s estimated that shrink at food retail specifically accounts for as much as 3% of total sales annually, although that number is known to vary widely and has likely increased for many grocers as a result of inflation and shifting consumer trends. McKinsey found that shrink has risen to between 5% and 15% of revenues for ready-to-eat and ready-to-heat products, with other supermarket categories seeing similar numbers.
So, what exactly does retail shrink look like today, and what are leading organizations doing to not only bolster their bottom lines, but also ensure the safety of their associates and customers?
Finding Solutions While Putting People First
As retailers continue to reckon with these pressing issues, many are initiating unique programs, and also working with local law enforcement agencies, third-party businesses and trade organizations to help them get a handle on solutions that prioritize the safety and well-being of both customers and employees.
During the RILA conference, Paul Jaeckle, VP of asset protection for Grand Rapids, Mich.-based Meijer, noted that the retailer recently sent out a shopper survey in an effort to better understand customer expectations when they’re on retail property, how they view security and what they value most. What Meijer found was that parking lot safety and security, as well as weapons on the property, were among shoppers’ greatest concerns.
According to Jaeckle, this data and information has helped Meijer build a road map to guide its asset protection and safety decisions across its operations.
“Your risk starts before the customer comes into the store, starts at your property line, starts virtually, starts online, starts on your digital platform,” Jaeckle said. “For us, we really began to take this particular approach of understanding our parking lots and saying, ‘What do I have the ability to … start to control in the parking lot before that risk enters into the building, where it becomes more and more serious?’”
RILA itself is also looking to drill down on the root drivers of habitual theft, violence and other unlawful activity in and around retail establishments with its Vibrant Communities Initiative. Under the initiative, retailers will collaborate with district attorneys, police departments, social service organizations, local policymakers, civic and business groups, and others, with the aim of enhancing information sharing, prosecuting habitual and violent offenders, proposing second-chance opportunities, and also exploring technology solutions that prevent retail crime and deter violence against employees.
For Kroger’s Harris, being able to discuss asset protection and retail violence with other retailers at an event like RILA’s conference is the silver lining to dealing with today’s major issues. “[T]here is no competition, there are no trade secrets when it comes to keeping employees and customers safe,” he said.