High-Shrink Store Programs: Why Focusing Your Resources on the Worst Performing Stores Will Reap the Most Benefits

Guide to Mergers & Acquisitions FAQ
High-Shrink Store Programs: Why Focusing Your Resources on the Worst Performing Stores Will Reap the Most Benefits

Retailers are used to managing a certain amount of shrink in the business - it's a fact of life.  However, that doesn’t mean executives should accept that shrink can't be substantially reduced, particularly in an age where corporate financials are under the microscope on a regular basis.  High-shrink programs, which marshal resources from all levels of the retail organization, are a key tactic in driving down shrink at outlets with the highest loss rates.

According to the 2005 National Retail Security Survey (administered by the University of Florida), retail shrink appears to be on the decline overall: Respondents reported an average shrink rate of 1.6 percent of annual sales, a slight increase from the 2004 rate of 1.54 percent - the lowest since the survey was first introduced in 1991.  The average rate had been on a generally steady decline in the past several years, according to the survey.

 

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