Study: Cashier-caused Shrink Up 26 Percent
SCOTTSDALE, Ariz. - Cashier-caused loss, the largest component of supermarket shrink, was up 26 percent in 2002, according to the 2003/2004 Shrink Survey Executive Summary just released by the National Supermarket Research Group (NSRG). In addition, overall supermarket shrink accounted for 2.32 percent of retail sales in 2002, the study finds.
"Shrink continues to be a major source of loss for the supermarket industry," said Larry Miller, an NSRG director. "As grocers operate in a traditionally low-margin, highly competitive environment, this makes them particularly sensitive to such operating inefficiencies. Assuming an average net profit of 1.10 percent and a shrink rate of 2.32 percent, for every $1.10 a grocer makes in net profit it has already lost $2.32 to unknown shrink. Best-in-class supermarket operators have realized that shrink recovery can be their top profit source."
Endorsed by the National Grocers Association, the survey was responded to by more than 100 supermarket companies representing nearly 9,000 chain and independent stores. Major findings included:
-- Per-store supermarket loss to shrink was $452,446 in 2002.
-- Conventional supermarket shrink was 2.13 percent of sales, while superstores reported retail shrink at 2.39 percent of sales.
-- Employee-caused shrink was the largest category of shrink at 57 percent, followed by shoplifting at 20 percent and back door receiving errors and dishonesty at 11 percent.
-- The largest component of employee-caused shrink was cashier dishonesty at 35 percent.
-- "Best in class" results occurred in companies that combined loss prevention technology and loss prevention practices.
"Shrink continues to be a major source of loss for the supermarket industry," said Larry Miller, an NSRG director. "As grocers operate in a traditionally low-margin, highly competitive environment, this makes them particularly sensitive to such operating inefficiencies. Assuming an average net profit of 1.10 percent and a shrink rate of 2.32 percent, for every $1.10 a grocer makes in net profit it has already lost $2.32 to unknown shrink. Best-in-class supermarket operators have realized that shrink recovery can be their top profit source."
Endorsed by the National Grocers Association, the survey was responded to by more than 100 supermarket companies representing nearly 9,000 chain and independent stores. Major findings included:
-- Per-store supermarket loss to shrink was $452,446 in 2002.
-- Conventional supermarket shrink was 2.13 percent of sales, while superstores reported retail shrink at 2.39 percent of sales.
-- Employee-caused shrink was the largest category of shrink at 57 percent, followed by shoplifting at 20 percent and back door receiving errors and dishonesty at 11 percent.
-- The largest component of employee-caused shrink was cashier dishonesty at 35 percent.
-- "Best in class" results occurred in companies that combined loss prevention technology and loss prevention practices.
