Inventory Shrinkage

Understanding how to calculate shrinkage in retail is important. However, understanding why it is important to control these results and how we can impact company profitability by both improving sales and controlling retail shrinkage is the key to success.

Inventory management underpins nearly every goal a retailer has, so executing effective management within the store is critically important.

When considering the problem of loss in a retail environment, it’s natural to first think about the register. After all, it’s where money changes...

How much of our shrinkage number is due to theft? How do you answer this question? Educated guess? Based on indicative feedback? Through deep data analysis? The “go to” tool to understand the answer to these questions, and move shrinkage from unknown into known shrink, is often the incident reporting tool.

In his third-quarter earnings call Tuesday, Dollar Tree’s CEO Gary Philbin announced that the company hired Robert Oberosler as senior vice president of loss...

From an LP perspective, a strong understanding of how retail inventory is managed is crucial to resolving shrink-related issues. One basic but important component is knowing the inventory control techniques and accounting methods used by your company. The two most common are the “retail” method and the “cost” method of accounting.

A recent report from the ECR Community Shrinkage and On-shelf Availability Group charts the scale and extent of the losses retailers are experiencing from a range of self-scan and checkout technologies. The research also provides a detailed review of the ways in which these losses might best be controlled.

The Retail Industry Leaders Association recently published "Total Retail Loss 2.0: From Theory to Practice," a report that analyzes the global retail industry’s adoption of the Total Retail Loss concept first introduced in 2016.

“It’s quickly becoming the most precise tool in our arsenal to meet an individual consumer specific need at the exact right moment...I think this will help us create the capability to grow profitably across the breadth of the portfolio and ultimately, again it’s putting ourselves in position to serve consumers in a way that gets them the product that they need when they want it and where they want it.” - Mark Parker, Nike CEO

In the highly competitive retail sector, ensuring that the right product is on the right shelf at the right time is critical. Yet the problem of shelf out-of-stocks (OOS) remains as stubborn as ever. Could the LP team be the key to unlocking this new sales opportunity?