Shrink is a big problem for independent grocery retailers. According to data from the 2020 National Retail Security Survey, shrink cost the grocery industry $61.7 billion in 2020. Those numbers have only risen in recent years as shrink eats up more profit margins for grocery retailers. As shrink increases, the burden falls on customers as prices rise and more security measures are implemented.
One of the significant contributors to the increase in shrink issues is the rise of organized retail crime or ORC. This type of theft is when a group executes a targeted plan to steal store items with a high resale value, like razor blades, beauty items, meat, alcohol, medications, detergents, formula, etc. Typically, ORC robberies happen quickly and in a pre-meditated and highly organized manner. An individual will enter a store, steal as much of one high-value item as possible, and then escape quickly to a waiting getaway vehicle or on foot. The perpetrators then resell the items online or at local markets.
In 2021, retailers reported a 26.5% increase in ORC incidents, and the numbers continue to rise. Videos of brazen attacks where an individual or group enters a store, and begins clearing shelves of products and then escaping are commonplace across the internet. But dealing with ORC crime isn’t the same as occasional shoplifting. Investigating and stopping these attacks requires a different approach, and some major retailers have even established ORC teams to deal with the issue. In a survey from NRF, ⅓ of retailers say they have established an ORC team. These teams analyze theft patterns, monitor repeat offenders, and look for security weaknesses in the store. These teams have specialized training that’s more in-depth than traditional loss prevention so they can partner with law enforcement personnel to investigate ORC crimes.
ORC theft significantly contributes to shrink but is not the only cause. Spoiled food, damage, in-store use, and regular shoplifting contribute to rising shrink numbers. While dealing with ORC theft may feel overwhelming, especially as an independent retailer, you can do something about the other causes of shrink, and we can help.
Our store operations team offers a program called G.O.T. Shrink. This easy-to-use program helps independent retailers track shink in their stores more efficiently. Using a handheld scanner, employees can track shrink on any product in the store, and the program will help deliver automated reports for management. This tool lets you see which items are the highest for shrink and where your store may lose money. With this data, you can also identify potential products that may be a higher target for ORC or shoplifting theft so you can take preventive measures.
Another benefit of the G.O.T. Shrink program is that it makes tracking shrink caused by expiration dates easier. With this tool, you can more easily check when a product will expire and create a price markdown label for a faster sale. This not only helps reduce shrink and profit loss, but it also helps reduce environmental waste too since you will be throwing out less product.
We know that increasing shrink numbers concern independent retailers, especially as ORC theft incidents also rise. Our team at UNFI is here to help. So, if you have questions about how your store can reduce shrink and prevent theft, contact us.
