Occasionally a store manager would call for assistance, usually after their produce department’s gross profit turned out low, and the shrink figure high. They wanted a fix. Right away.
Fortunately, a produce department’s slipping performance is fixable. This is done with some oversight, ensuring the produce manager orders closely and follows a strict regimen of daily backroom and sales floor product rotation, and training clerks to carefully handle, prep, cull and stock fresh produce. Simple, right?
Read more: When shrink happens, turn it into a positive!
However, other culprits are lurking. I call it “hidden” shrink. A few examples:
Evaporation steals away profit, adds shrink – and you hardly know it’s even happening. Since most produce is 90% (or more) water, you must take steps to minimize this natural dehydration or your inventory will slowly, steadily lose valuable weight. Combat evaporation by immediately putting the load away, turning your inventory often, maintaining the cold chain, regularly crisping leafy greens, air-stacking bananas, rotating product, and using tools such as refrigeration, water and ice.
Billing ad price/pack size errors can quietly add to your shrink if you’re not paying attention. Make it a habit to check off your invoice daily. You were charged for 27 cases of grapefruit. Did you indeed receive this amount? You got all your nectarines; the invoice says volume-fill, but you received Panta-Paks. A specific ad price was supposed to be billed on that pallet of grapes. Was it? Make it a habit to check your quantities, quality issues, pack sizes and billing prices every day. Report errors to your warehouse for prompt credit. Most chains’ distribution centers strive for accuracy, but don’t let their occasional mistake become your shrink problem.
Internal purchases add shrink and eat away profits too. With numerous internal departments (deli, specialty meat, seafood, salad bar, etc.) “hungry” for fresh produce, each regularly shops your department for their needs. Except for adjusted pricing on culled or distressed produce, ensure every item is rung up as a normal retail sale for your department. No discounts, no exceptions.
Merchandise transfers. It’s great when you’re able to help a sister store who needs a dozen cases of bananas to help them get through the day when they’re short. Make sure your chain has a way of not only charging and issuing credit between stores, but also ensure the retail extension (the retail dollars you’re accountable for) is also transferred within the paperwork. If not, it becomes shrink. Your shrink.
Product ID tests. You can do everything perfectly in managing your produce department. But at some point, all that shopped produce is rung up and goes down the checkstand belt with your customer. Is organic being rung up as conventional? Are leeks being sold as green onions? Shipper labeling and packaging has greatly improved checkout accuracy, but it helps to work with your store manager, communicating with your front-end cashiers and providing weekly produce ID tests.
Also, at least once every week or so, it’s wise to run an internal produce detail report so you can compare what your produce should be selling for with what is actually in the system. This is uncommon, but I recall a doozy of an internal pricing error at an otherwise well-run store (but one that had a shrink-heavy quarter) where we discovered a heavy-volume apple variety that had been selling for a weeks-old “hot” 2-pounds-for-a-dollar ad price and, through some glitch, was never corrected to the regular $1.99-per-pound price. Ouch.
It’s not easy to manage a profitable produce department, but a little vigilance helps. By shining a light in these corners, you can help shrink your, um, shrink.
Armand Lobato works for the Idaho Potato Commission. His 40 years’ experience in the produce business span a range of foodservice and retail positions.