Summer’s winding down. We don’t have to worry so much about shrink now, do we? Of course we do. Shrink awareness isn’t just for small stores. It also isn’t only a problem in high-volume operations. Shrink doesn’t take a day off nor is it very forgiving if you occasionally forget to rotate. Some produce managers might put shrink awareness on the back burner once summer is over, as that is indeed the peak period for loss, but shrink is shrink is shrink.
It’s a year-round, expensive, profit-draining pain in the you-know-what.
Because most shrink is caused by human error, here are a few notes on battling this ever-elusive produce foe:
What exactly is shrink?
Shrink is largely avoidable, but a certain amount is inevitable. Even the best produce managers can count on enduring some shrink. Consider that most produce items are 90%-plus water. This weight is ever respiring, ever dwindling before our eyes. Sure, we keep fresh produce loss in check with misting systems, refrigeration and more. But evaporate it does, and we’re in a race to sell it, or smell it, as the saying goes.
Shrink, simply defined, is the difference between what you are expected to sell something for, versus what actually gets rung up at the checkstand. If the potential for something like a bunch of leeks, for example, can be a $4 ring, it could easily ring up for less, considering whatever roots or unsightly leaf sheaths are removed. Factor in things such as age, decay or dehydration, and the leeks could end up being a $3 ring. The one-dollar difference is of course, shrink.
Here’s what the savvy Produce Shrink Investigator looks for to minimize loss:
>1 Accurate ordering
All of my prudent produce peeps agree: Accurate ordering is the single, biggest defense against excessive shrink. In a perfect world, you order for exactly what will sell until the next delivery arrives. The formula is simple: Need, minus inventory on hand equals what is ordered. Because ours isn’t a perfect world, you have to apply your experience and best judgment. Variables such as quality, price, ad items, customer traffic, holidays and competition, are just a few that come to mind in attempting to write that close-to-nearly perfect order.
Further, if you only order what is needed, there’s far less chance merchandise will linger in your cooler, aging or run the risk of being damaged or mis-rotated. This is the worst kind of shrink — where the product never even gets out on the shelf (a total loss and 100% shrink).
>2 Cooler organization
How’s your backroom etiquette? Do you insist on having the receiving area clean and ready when your load arrives? Is the load immediately broken down to maintain the cold chain? Are cold items put away into the cooler and non-refrigerated items put away in the ambient storage area? Is everything stacked neatly, easily accessible and easy to identify? Do you code-date the items in the cooler so clerks can see which items came in when? Do you direct your crew to follow the FIFO rule (first in, first out)?
If you follow these rules every day, your backroom etiquette is exquisite.
Not to mention, you’ll have a leg up on controlling your shrink, while streamlining labor. An organized cooler means clerks spend less time digging through pallets, and more time on the sales floor — where every minute counts.
>3 Display holding power
If you’re serious about minimizing shrink, build your displays so they will sell (turn) at least once per day. For example, if you sell seven cases of oranges a day, that’s ideally how big your display should be. If your allocated space is too large, consider either cutting down the facings, or “dummying up” the display base with inexpensive props such as cardboard or foam.
Always try to spread out, rather than deepen building displays. Avoid stacking produce more than a couple layers high to limit damage, resulting from tumbling displays or from too much weight on the base. A smart, shrink-control display is fresh, attractive for your customers’ eye, yet easy for clerks to stock, clean and rotate each day.
>4 Rotation – back room
Speaking of the devil. Rotation demons that is, is what produce managers will say is probably the second-most critical point in controlling shrink. Backroom rotation consists of putting new product away and rotating the oldest product in front of the new, making sure that everything is code dated so you don’t have any produce cases overstaying their welcome.
>5 Rotation – display
Because rotation ranks so high on the priority list, it’s listed again. This time in regard to what happens at the stocking phase. Instill in your crew the mindset of rotating every item, every time it is stocked. Typically, this means removing older product from a display, placing a fresh layer or two down as a base (or newest expiration dates behind) and reworking the older (but still fresh) product on top and toward the front of the display, making sure to cull any unsightly or unsaleable product.
>6 Storage temperatures
Know your temperature zones. Keep cold stuff cold and everything else in ambient storage. Pay special attention to produce items that are susceptible to chill damage such as: Tomatoes, bananas, potatoes, onions, basil, and pineapple. If in doubt, look on the outside of the original shippers cartons.
Each commodity usually lists the ideal storage temperature.
This is a must: Have a sense of urgency when receiving a load in regard to storage temperatures. Even a short delay on a warm dock reduces shelf life on sensitive items such as berries, mushrooms or packaged salads. Any break in the cold chain translates into shrink – losses that can be avoided with consistency and close attention to detail.
>7 Handling: backroom& stocking
Did you catch the word “place” earlier? As in “place a fresh layer or two down as a base” when rotating a display? Fresh produce I like to say, isn’t Harley parts. We don’t have any “hardware” come to think of it. Every produce item has to be handled gently. Full cases need to be carefully stacked, never dropped. Every display has to be stocked with care as well, never handled roughly or dumped. Bruised fruit ends up being culled and even if reduced in price, adds to shrink.
Train your clerks to trim only what is necessary to make an item attractive for sale. Follow your preparation, misting and crisping guidelines to minimize shrink. Both points here remind me of what an old store manager once said, “Water is weight, weight is pounds, and pounds is money.” Careful trimming and crisping help keep the shrink money where it belongs, in the cash till.