Collaboration in the Queen City: Kroger Asset Protection Expects to Win

Asset protection professionals from each of the 23 Kroger divisions converged on Cincinnati during the second week in October with division AP leaders and assistants, high-potential district AP managers, and the core “GO Team” from the corporate office, in their first live national meeting post COVID-19.

The event was held at the eclectic Graduate Hotel and Conference Center near the University of Cincinnati. If you have never stayed at a Graduate Hotel, it’s quite a treat, with rooms that are unique and themed in a variety of ways. These are the kind of rooms that makes you want to send pictures home to your family (as half of the attendees were compelled to do) including one that I am glad I was not in—which featured a “Chucky Doll” lamp from the horror movie Child’s Play.

But that was likely the only scary thing that week, with the atmosphere feeling less “fearful” and more “family” as the Kroger family of companies once again got back together—and got to do so under their former, and once again current leader, Mike Lamb. These were days filled with threat management and life safety, financial updates, technology, demonstrations and discussion, the Kroger Allsafe! Safety Program, front-end partnerships, selling fresh, supply chain, ORC, and a whole lot of fun mixed throughout.

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As this group did such a great job throughout the week recognizing the excellence of others within their teams, I feel compelled to call out a few of the key players who made this week such a success. It starts with the event hosts who led these interactive sessions, including Terri McCoubrey, Kevin Larson, and Teresa Tucker, all of whom did a phenomenal job of both putting together a dynamic agenda and serving as hosts and moderators throughout the event. I do have to say that it was a bit distracting for me to have another “Kevin” being called to support in moderating, as that is a role I play often, but he and the team did a fantastic job developing the thought leadership of this team.

Day One

Mike Lamb’s opening inspirations included a few messages that resonated throughout the week including “Expect to Win” and “Take a Swing”. Mike is inspiring his leaders to focus on success, keep a positive mindset, and work in a way as to expect the result you are aiming for. He also encourages his team to not be afraid to try new things, admitting that not every swing is a hit, but not every swing is a miss either—and it may lead to a big win.

The message on shrink control is reduced to its simplest form: “Sell More and Lose Less.” As Mike says, sales are important and increasing sales can help your shrink numbers if you are controlling your losses. An important message to all asset protection leaders is to ensure a strong partnership with your store teams to help control loss, while always operating in a way that supports driving sales. At the end of the day, it is possible to out-sell shrink.

An opening session delivered by Paula Kash, group vice president of operations, offered a simple equation for success: “ORC and Compliance Teams + Division Managers = Safe and Effective Stores.” Paula explained that the “Selling Fresh” program is about giving our best to customers by improving freshness, growing sales, and reducing shrink—the core of operational best practice. The focus of Kroger leaders is on four critical strategies:

  1. Freshness – maximizing fresh quality while not compromising on being full (well-stocked);
  2. Funding – Freeing up funds to invest in our price, our people, and our stores;
  3. Operational Best Practices – retraining the stores on operational standards vs. focusing only on shrink; and
  4. Environmental Stewardship – minimizing wastage substantially to do better for our planet.

The mission is one of sustainable change and accountability, focusing on up-stream, in-store, and leveraging AI and emerging technologies to develop innovative solutions that ensure long-term success. A key message to anyone in asset protection leadership was that you win when you drive execution, teach, train, and develop your division and store teams, teach them how to control losses and manage waste, and to know and own key processes. Paula encourages everyone to set high expectations, follow up with your teams, and create the momentum necessary to lower shrink.

Tina Baumann, the senior manager of safety and OSHA compliance, is an absolute all-star when it comes to developing, launching, and driving the Kroger AllSafe! program across the enterprise. Tina is a tremendous resource when it comes to safety experience and knowledge. She has been a contributor to a variety of industry webinars and conferences, and is always open and willing to help in any way she can. She was very deservedly given a very special award for leadership and excellence in her efforts with the Allsafe! initiative and was even crowned the “princess of safety” tiara and all.

The Kroger AllSafe! Team (from left to right) Tina Baumann, Mark Gully, Jamie Reis, Karen Leonard, Jeremy Browning, Harry Hollifield, Steve Menzor, and Anna Scott.

Frank Patercity, the director of corporate security, investigations, and ORC and a somewhat recent addition to the Kroger corporate office, was in the spotlight several times throughout the week with several innovative, thought-provoking, and even moving presentations, including a session by the mother of an active shooter who killed six people in a stabbing and shooting spree in California, in May 2014, before turning the gun on himself. The presentation offered a very different perspective on active threats, providing insights into the personal pain and struggles of the family of an individual who commits such a heinous crime. Since the tragedy in 2014, this mother has suffered with the pain and guilt of her son’s actions, struggling to understand why and how he would be so destructive and cause so much pain to so many people. With the benefit of hindsight, reflecting back on his behavior and actions before the event, and through evidence uncovered during the investigation that followed, she shared her very personal and painful journey. Taking nothing away from the pain and devastation of the families and friends of those involved, this session offered fascinating insight from a perspective rarely seen.

Frank had a number of significant contributions to the event overall, especially in leading discussions around threat assessment—what it is and what it isn’t. But it was the “Conversation with a Booster” session that provided actionable intelligence for attendees to take back to their stores. A moderated interview with a former booster who would steal specifically from Kroger stores, we heard from “Karen”, a former addict and shoplifter connected with a very organized group of thieves. Karen had a mentor who taught her how to boost large quantities and a variety of products to steal and sell, making $500-800 a day. Karen provided tremendous insight into the strategic and pre-planned approach they would take, implementing a route based on an understanding of how profitable each store would likely be and ending with a fence who would buy what they stole that day. Her boyfriend was the driver, and he knew how to avoid cameras. He knew not to park in the front of the store, but rather in the middle or to the back of the parking lot, making it less likely they would be followed if pursued. This was their full-time job and they took it very seriously.

While Karen provided full details of how they would pick stores, work together inside, and what items brought the most return, when asked, “How do we do better to prevent boosters?” Karen had the following advice:

  • Customer service is key. Any booster will be a little nervous, even if the associate is trying to be helpful. Teach and train your associates to provide the best customer service they can.
  • Be aware of how much product is on your shelves. Do you need 60 Zyrtec on a shelf at a time? Will that many sell in one day? If it is all on the shelf and available, it is more likely to be stolen in one visit.
  • Product location is important. High-theft merchandise close to the doors, with a clear path to the doors, or out of the line-of-sight of store associates, is vulnerable product.
  • EAS alarms are less of a deterrent for a booster, as no one stops them and they just keep walking. Have a plan and educate your associates on how to respond to EAS alarms.
  • While Karen herself was not violent at all, she warns that many boosters are. Don’t follow them out to their car as they may become aggressive. Don’t stand in front of their car or try to prevent them from leaving.

As a huge fan of innovative solutions, my favorite session was the one delivered by Chris McCarrick, senior manager of asset protection solutions and technology. While much of what Chris presented cannot be shared in detail as these exciting projects are being kept close to the vest, a number of these stand to position Kroger as a leader in the industry. Featuring an interesting and long-overdue approach, solution providers are encouraged to collaborate on how their solutions can work together. By taking best-in-class solutions and connecting their platforms in a way that puts competition aside and cooperation at the forefront, this creates an AP technology ecosystem that maximizes the investments made by Kroger. While a massive undertaking in such a large organization, there is a plan in place and a rollout strategy supporting the business with a focus on priority and performance while driving overall profitability. This is one of the most advanced and innovative technology strategies I have personally seen, and it may well be the future of asset protection. By having solution providers truly working together to create holistic solutions that are connected and speaking to each other to allow each solution provider to remain strong in what they do, they create a collaborative force for the benefit of the customer.

It wasn’t all work, however. In addition to a variety giveaways and raffles, there was a little trivia throughout to throw in a little fun and to give some insight into the quirks and histories of some of the senior leadership team, and a little local trivia as well. While nothing overtly embarrassing or blackmail-worthy was offered up, it was still fun to learn a little more about the people in the room. It offered some great ice breakers and networking conversation starters for sure, and how interesting and funny it was to learn that the first recorded crime in Cincinnati was… the theft of a cucumber!

Day Two

While day one being all about “inform, inform, inform” with presentations from within the corporate AP and safety teams, day two was about process and bringing success back to each market. It was strong partnerships across the business that were clearly driving success at Kroger and that were on display all week with a revolving door of presenters from senior leadership roles across the organization.

With VPs from Meat and Seafood, Deli and Bakery, Produce and Floral, Front-End, Center Store Merchandising, Freshness and Standards, HR Training and Development, all coming together to present and listen, each area of the business reinforced their commitment to ensure collaboration and cooperation in driving store goals. This is how a team wins the war on shrink—when its leaders, across the organization, are all speaking the same language and focused on the same goals to sell more and lose less.

As a really great way to start many of the sessions at this event, as they do in their stores and internal meetings, they start with an “uplift”, with one or more people sharing a personal or professional story, demonstrating that there is always something to be proud of. Supporting one of Kroger’s core values as “Everyone Friendly and Caring”, this only serves to increase the comradery and cohesiveness of these teams. As we heard from Kroger’s leader of well-being and career development, this also supports a culture of listening and is a critical component of Kroger’s well-being strategy.

Throughout the day we heard about things like shrink analysis, and the teams doing exercises on what drives shrink, impact on sales and recovery, and improving results. We heard about AP execs focusing on “Selling Fresh” and solutions to mitigate shrink in the stores, demonstrating product ideas and getting feedback from the field for future testing and pilots where they could provide input into what they think will work in their stores, and what will not. We also heard about the Reclamation Processing Center, where product that cannot be sold in the store is sent either to be picked up by a vendor to be distributed to groups in need or sold as salvage. All of this supports Kroger’s Zero Hunger – Zero Waste initiative.

Other presentations certainly worth mentioning included those delivered by AP Directors Chris Brown and Chris Harris. Chris Brown provided a walkthrough of the Double Down audit to improve on the operational behaviors that affect store inventories. Chris Harris covered supply chain and DSD, speaking about Kroger’s recent partnership with Globalworx to modernize DSD operations. This will provide stores a much more automated process to get away from the paper-based legacy, and will streamline store access and check-in, as well as general operations and follow up.

Day Three

Day three had more of an inward focus, with a visit from HR Training and Development and a discussion on supporting overall well-being. The use of “well-being” is intentional. While many would refer to this as “mental health,” at Kroger mental health is considered an overall part of well-being. There is a whole ecosystem around well-being and about how you feel about coming to work, about your money, and about your home life. This group’s focus is on developing Kroger leaders, connecting and retaining talent, and advocating for their associates’ well-being. Kroger’s holistic well-being focus is one that is emotional, to include mental health, community, financial, career, and physical. It is clear the mission of this team is to demonstrate how much they care about attracting and retaining their people, and wanting them to love their job, while instilling a sense of ownership in the business, promoting a passion to improve every day, and keeping people at the heart of everything they do.

We don’t always know the challenges that people are facing. We tend to mask these challenges and it is important that you know the resources and tools available to you, whether in business or in your community. At Kroger, this is an amazing and very comprehensive suite of resources for employees and their families.

The closing session continued the journey inward with a challenge for attendees to reflect on what they learned while identifying ways to bring this knowledge back to their business partners and teams. Reinforcing this message with their teams further strengthens collaboration and improves overall team performance.

Events like this Kroger AP conference cannot be held without the generous support of leading industry solution providers like LiveVue, CAP Index, ThinkLP, Everseen, Metro One, Sensormatic, Appriss, Axis, Checkpoint, Gatekeeper Systems, ADT, and American Guard.

It is very clear that fighting shrink at Kroger is a collaborative effort, infused into the daily functions of everyone in the organization. The inclusion of all of these senior leaders from across the business, showing up to make themselves available and to further solidify the partnership with the AP team, sends a strong message. The goal is for everyone to work together to deliver fresh product and excellent service, while executing with excellence to protect company profitability and reduce loss. The way we shop is evolving—and the way we fight shrink is, too. Kroger is on the right track and on the front edge of employing the right strategy across the organization. If you work for this team you should be excited and proud…this team is winning.

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