Page 210 - DMGT553_RETAIL_STORE_MANAGEMENT

Unit 11: Loss Prevention and Shrinkage Control

Notes

Case Study Market Basket Reduces Shrink 22%

Company Background – Market Basket Foods
Founded in 1961, Market Basket Foods is a privately-owned and operated conventional
grocer serving the East Texas and Louisiana with 33 full-service supermarkets. Market
Basket supermarkets offer full variety of grocery foods including fresh produce, quality
meats, fresh bakery goods and floral departments. Market Basket employs more than
2,000 supermarket associates.
The Profit Challenge
Market Basket Foods faced challenging economic conditions and increased competition
from chain store grocers many times its size. While profitable, Market Basket wanted to
improve its financial performance and its competitive market position. The leadership
team at Market Basket established 4 aggressive goals: (1) reduce store shrink 15%, (2)
improve store manager effectiveness to drive store profit 10%, (3) improve perishable
department sales, penetration and profit, and (4) improve store supervisor effectiveness.
Strategic & Tactical Implementations
Market Basket President Sky Thompson selected the Retail Control group, lead by Larry
Miller, to conduct initial store operations and shrink loss control “needs assessment”.
Following a detailed companywide and store level ‘current practices’ review and store
manager and supervisory staff interviews, the consultant team from the Retail Control
Group presented the Market Basket Executive team with a “Findings & Recommendations”
report. Following, the Retail Control Group was selected to lead a shrink reduction and
profit improvement initiative at Market Basket. Specific to this initiative were 4 core
programs: (1) The Total Store Manager training program, (2) The Professional Store
Supervisor training program, (3) Vision, Standards and Internal Brand development, and
(4) Internal Store Operations Excellence Audit. Scope of work included customization,
training and 12-month implementation effectiveness assurance for execution and
accountability.
Based upon excellent program follow-through and best practices execution, Market Basket
reduced store shrink 22% and exceed its annual profit improvement goals in just 22 weeks
achieving a 5:1 ROI in the first 6 months and is on track to sustain [and exceed] these gains
for year one.

Store Operating Improvement Results
Based on pre-implementation benchmarks, store operating results improved to EXCEED
project goals. Below are the audited and verified performance improvement results
achieved as measured across 33 Market Basket stores, in just 22 weeks.
Total Perishable Shrink Reduction DOWN 29%

Total Non Perishable Shrink Reduction DOWN 31%
Increased Meat Sales UP 5.4%
Increased Produce Sales UP 9.1%

Contd....

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