Is Shrinkage a major problem in your Supermarket?

Shrinkage is a tabooed part of the business. I think most of want to either overcome it or dislike talking about it.  Keeping it under control is a giant task since it plays a huge part in every retailers business.

What is the meaning of Shrinkage?

A reduction in inventory due to employee theft, shoplifting, administrative errors and supplier fraud.

Sounds very simple but facts show that we certainly need to do something about  it. The table below highlights the different sources of shrinkage loss in major continents.

Retail Shrinkage Facts

Reference: The Global Retail Theft Barometer 2011

If the shrinkage percentage is high then retail automation needs to be higher to counter it. Keeping shrinkage rate to the least is very critical to the success of any retail business. Today, we will focus on supermarkets alone and analyze the reasons for shrinkage in brief and if there are any possible and practical solutions to beat it out.

Theft by Employees

Generally, when supermarkets have more billing counters, the number of employees handling the cash is high and at such time, employees may steal. To stop such malpractices, supermarkets already have CCTV cameras to keep a close watch on employees and have regular security checks. Still the problem persists.

GoFrugal Technologies Supermarket POS software have some trusted features that can warn retailers before thefts happen.

1.Till Manager  provides accuracy in opening cash, cash denomination and controls the  counter user. This helps retailers to view and withdraw the money from counters on time.

2. Security Manager gives retailers the choice to give selective menus and functions based  on the role of the employee. Functions can be limited to creation of sales bill. For more functions, retailers can set password protection and manage different counters through screen operations.

3. Cash Handover makes it easy for them to view the details of the cash given to every till user at the start of the shift and tally it at the end with the sales bill created.

Supplier/ Vendor Fraud

Supermarkets where the number of SKU’s is high, the need to update prices frequently becomes important. Sourcing of inventory at the right price is pivotal to success. Suppliers could be selling at a price above the market  price. Purchase Rate Discrepancy is the perfect solution to tackle such suppliers. This feature alerts the retailer when there is a price difference especially when goods are purchased regularly or even in large quantities.

Administrative Errors

Retailers face many problems when they have to handle many people. People are bound to make errors even after proper training is given. To handle such cases and to keep an eye on such errors, the Snap Shot feature is great. The bosses can get an overview of all the sales bill from the comfort of their seat. Audit Viewer is a swell feature that keeps track of all the critical changes done by  users at a particular date and time. So, a change in prices can be  noticed on the spot.


Shoplifting always tends to rise due to high inflation. In such times, goods are priced out of consumers’ reach. Rise in unemployment is also associated with an increase in shoplifting.

Supermarkets can spot them when they see any of these or some similar signs such as:

1. Bulky and heavy clothing during warm weather

2. Shoppers seem nervous  and possibly pick up random items

3. Frequently enter the store and don’t make a buy

4. Spend too much time watching sales people than shopping

5. People enter in large groups and one among them creates a disturbance.

I believe supermarkets can turn their shrinkage percentage to ZERO if  only they give it some serious thought and use the right solutions listed in this blog. You can also download the Supermarket solution for FREE here. Will be back with some more interesting solutions only for supermarkets very soon.