I pulled these numbers to expand on this blog post from last week.
The National Grocers Association, Washington, D.C., recently released its 2017 Independent Grocers Financial Survey that had some really interesting points about shrink and performance.
According to the report, total shrink in produce among independents is 6.2%, but there’s a big shift in numbers between small operators and those with 31+ stores.
Single-store operators reported 7.8% shrink in produce, those with two to 10 stores reported 8.1%, 11-30 stores reported 3.8% and those with 31-plus stores reported 2.9%. How do your numbers compare?
Hey, at least we’re not a bakery. Their shrink is 8.5%, the leader in all categories, but their gross margin was also the highest, at 42.63%, compared to 31.28% gross margin in produce.
Total store shrink was 3.2%, and total gross margin was 27.13%.
The survey had some pointers for retail, such as tracking produce shrink at retail, instead of at cost.
“Measuring shrink at cost is useful for accounting purposes, but measuring shrink at retail price helps highlight its importance to the bottom line and may prompt greater motivation for performance improvement,” the authors said. “Stores that use the retail method have lower-than-average shrink, at 2.4%.”
Shrink programs, and third party shrink audits, authors said, are especially beneficial in helping mitigate shrink in perishables and theft-related losses.
The report, produced by FMS Solutions Holdings LLC, is available for purchase for FMS customers and NGA members for $75, and $300 for non-members. Go here to purchase.