No. of Recommendations: 5
It would be nice to know exactly what the problem is, without the 'shrink' euphemism. Where is the shrinking happening? They mention supply chains, inventory and at checkout, which are all very different problems from each other. And if outright robbery (a holdup, for instance, or someone just brazenly walking out the door without paying) a big part of it, or is putting something in your pocket, or is it collaboration between the client and the cashier, or is it not scanning things at checkout, or what?
These are good questions and I haven't seen a good answer to them. I do think the problem is more complicated than an increase in 'walk out the door' type theft, facilitated in part by DG's staffing model and the move to self-checkout.
I occasionally read DG employee forums to get a read on some of the issues arising at the employee side. Its true there are quite a few complaints about self-checkout and how it leads to theft, which I can understand on a psychological level -- I've seen fellow customers do it myself (not scan a couple items, or whatever, because X). There's also various reports of brazen walk out the door theft, and the refusal of police to get involved. As its become easier and more common to low-level thieve, perhaps it's also become a bit more culturally acceptable. I know that here in Canada where the grocery industry is basically an oligopoly, low level theft via self-checkout is now celebrated in some circles as a way to stick it to grocery chains (the honest customer pays of course, but I've heard the rationale more than a few times). No idea how much that contributes to shrink in the grand scheme of things.
But returning to DG employee forums, there are also quite a few complaints of store managers writing off pallets worth of goods, and then taking the same home, or the store restoration folks coming in to restore a store, dumping certain merchandise, and then taking the whole lot. It takes quite a few stolen snickers bars to match this kind of organized corruption in some of their staff.
At the end of the day, I don't think shareholders have been given a good portrait of where or how the shrink is happening, aside from the indication that the lack of front end staffing and the use of self-checkout has been at least part of the problem. It's entirely possible DG is still trying to track some of this stuff down.
