SHRINKAGE

Shrinkage in a Retail Store

[Shrinkage in a Retail Store

Executive Summary

The purpose of this project was to develop an understanding of the reasons behind the continued stock discrepancies and 9% shrinkage in the branch in Camden of Savers Health and Beauty. The project aims to find out the contribution of employees in this area and to recommend ways in which the shrinkage level can be reduced as that is essential for the store to increase the sales and retain customers.

The data is collected in the form of observations and interviews to understand various processes around the store such as the delivery system and the stock movement to mark key areas of problems. Interviews of staff members to know about their opinion and recommendations from them to the problem of shrinking mainly associated with damage and theft were conducted.

The findings revealed that there were some vulnerable processes and procedures that encouraged the increased shrinkage such as unauthorised staff entering the stockroom, lack of vigilant supervision at the time of delivery of products, security tags not properly put. In terms of prevention and detection of the criminals, the respondents in interviews suggested installation of more CCTVs at places that were not covered yet with strict surveillance so that both customers and staff involved in such an act can be identified. Further there were suggestions of random staff searches, better training of staff for handling fragile products especially and increasing awareness of the employees regarding the consequences of indulging in such acts.

On the basis of data collected and suggestions given by the employees, recommendations proposed would primarily require from the branch to increase staff and customer monitoring and surveillance making use of CCTV more effectively, increased supervision at the time of delivery of products, and training of the employees to handle the products carefully.

Introduction

Shrinkage is a term that is used when there is a difference between a book inventory and physical inventory count. Losses can be due to many reasons which include supplier fraud, internal theft, external theft, paperwork errors and damages during stock movement. Shrinkage can affect any type of business but it is a major problem in retail industry. It can serve as a detrimental factor in reducing profits and thus negatively affect the retail business. To combat shrinkage, they then have to devise strategies and take measures appropriately so that they can survive in this competitive market of today. Savers Health and Beauty, one of the leading retail stores in UK has a branch in Camden which is facing this problem of Shrinkage and requires research of the key areas that are promoting this stock figure discrepancy since months. The project thus investigates the procedures around the stocktake at this branch to identify the contributing factors in shrinkage and recommend measures that help in combating it.

Company Profile

Savers Health and Beauty is a discount chain based in UK and owned by A.S. Watson Group, comprising an enhanced range of ...