Shrinkage can feel a lot like a ghost haunting your grocery store.
You might not see it — but you can certainly feel its effects when your shelves are emptier and your sales are lower than they should be.
That’s why we’ve created this guide to share how to reduce shrink in a grocery store. Keep reading to learn about the most common causes of shrinkage, and our favorite shrink-busting tools.
What Causes Shrink in a Grocery Store?
Your grocery store might experience losses for a variety of reasons. Let’s cover a few of the main culprits behind retail shrinkage:
- Shoplifting: Shoplifting occurs when a customer takes merchandise without paying for it. In grocery stores, shoplifters might use strategies like label switching, self-checkout theft, or simply taking items they didn’t purchase.
- Employee theft: Employee theft is a tricky and potentially disastrous type of theft that occurs when one of your team members steals from your grocery store. Given their level of access to your business’ resources, your employees might directly steal merchandise, pocket cash from sales, or engage in fraudulent activities like voiding transactions or creating fake returns.
Shoplifting and employee theft can take a major toll on your business’s bottom line, but another unique cause of grocery store shrinkage is waste.
If your grocery store stocks perishable goods like meats, produce, and dairy, spoilage can pose a huge threat to your profits. For example, if you place a large order for milk, but your customers don’t purchase all of it before its expiration date, you’ll have to record it as a loss in your sales records.
Over time, these spoilage-related losses can add up, wreaking havoc on your grocery store’s financial health.
How Can You Reduce Shrink in Your Grocery Store?
We’ve covered why grocery store shrink happens — but what can you do about it?
Let’s look at four key tools that you can use to reduce shrink in your grocery store and protect your business’ profitability.
1. Grocery Inventory Management Software
Understanding inventory management best practices and implementing inventory management software is crucial for learning how to reduce shrink in your grocery store.
The main function of this tool is to keep real-time, accurate records of your stock levels, allowing you to access an overview of your inventory at any time, from anywhere.
Inventory management software enables you to immediately identify inventory discrepancies, revealing where your records don’t match what’s actually on your shelves. Equipped with this data, you’ll be able to identify your most commonly stolen or spoiled items.
A solid inventory management software solution will go beyond tracking your inventory levels and revealing discrepancies; it should also give you helpful insights that empower you to prevent waste before it happens.
For example, if your software shows that your sales of hamburgers and hotdogs start to drop as the weather gets cooler, you’ll be able to stock less of these items, preventing them from expiring in your refrigerators.
2. Security Cameras
Installing security cameras is an effective way to prevent theft in your grocery store. Security cameras serve two main purposes: to deter thieves and to identify repeat shoplifters.
If a shopper is planning to steal from your grocery store, they may change their mind after seeing your security cameras. Similarly, if you’ve noticed an uptick in your store’s shrinkage, you’ll be able to analyze your security camera footage, identify instances of theft, and take the next legal steps to protect your business.
Make sure to use a combination of real and decoy security cameras, and place them strategically throughout your store. A few key areas to install cameras include the entrance and exit of your store, your self-checkout stations, and other high-traffic areas.
3. Integrated Deli Scales
Did you know that deli scales play a significant role in your mission to reduce shrink in your grocery store?
Inaccuracies in your deli and butcher department can be a significant source of discrepancies in your inventory and sales. For example, if your store’s butcher prepares an order for two pounds of sirloin steak, but your customer only ends up paying for one pound, you’ll experience a hefty loss.
A deli scale that’s integrated with your grocery store’s point of sale (POS) system can prevent this problem and make things easier for your butcher and deli specialists, your cashiers, and your customers.
With an integrated deli scale and printer, your employees prepare a customers’ order, place it on the scale, and print a custom barcode label including the item information, weight, and price. At checkout, all your cashier has to do is scan the barcode to automatically subtract the item from your inventory and charge your customer the right price.
4. Point of Sale System
The most important tool you need to minimize shrink in your grocery store is a powerful POS system designed specifically for grocery stores.
Your POS system is the nerve center of your grocery store. It processes all of your transactions, tracks your inventory as it moves through your store, and gives you insights into your business’ performance. This system puts the most powerful shrink-reducing tools right at your fingertips, allowing you to more easily keep tabs on your grocery store.
Let’s explore some of the key POS features to put to work in your shrinkage-reduction strategy:
- Inventory Management Features: Your POS system should have built-in inventory management features that show you your real-time stock levels, bestselling items, and inventory turnover rates. Equipped with this data, you’ll be able to optimize your inventory and prevent spoilage.
- Employee Permissions: This feature is designed to prevent and reduce employee theft. Within your POS system, you should be able to set specific permissions for your employees, allowing them access only to certain information or tools.
- Shrinkage Monitoring: Along with standard inventory management features, your POS system should also provide detailed reports showing your grocery store’s shrinkage rate. This feature will help you understand the impact of spoilage and theft on your business’ overall profits.
- Sales Reporting and Analytics: Your POS system should monitor your store’s financial performance and provide you with insightful reports showing your overall sales. You’ll be able to compare your inventory reports with your sales reports and identify discrepancies before they pose a major threat to your bottom line.
Choosing the right POS solution is a vital step on your journey to learn how to reduce shrink in your grocery store. Make sure to shop for a grocery-specific system designed to handle the intricacies of perishable inventory and spoilage.
Eliminate Shrink in Your Grocery Store With Markt POS
Now that you know how to reduce shrink in a grocery store, you’re ready to implement these strategies to protect your small business’ bottom line.
If you’re looking for the best tool to add to your arsenal against theft and spoilage, look no further than Markt POS. Markt POS is an all-in-one POS solution designed specifically for small grocery stores just like yours.
With robust inventory management features, integrated deli scales with printers, advanced reporting, and more, Markt POS has everything you need to reduce shrink and boost your sales.
Schedule a personalized demo today to see Markt POS’ shrink-busting features in action.
