My favorite author (Anonymous) once said this about focus: “If railroads had understood they were in the transportation business instead of the steel-rail business, we’d all be flying on Union Pacific Airlines.”
That’s just one thought as we head full-steam into summer, the produce department’s busiest period.
Specifically, my focus this week is about shrink. Shrink (the difference between what a produce item should sell for, as opposed to what actually gets rung up in the till) is also known as loss or waste. As summer is peak season for produce volume and sales, it is also peak season for shrink.
Some of summer’s shrink can be attributed to factors a manager has less control over.
Consider this: A produce manager must manage the most volatile categories (such as stone fruit, cherries, berries, and local produce) in the highest-volume time of year, and depend upon temporary or the least-experienced clerks to handle it all — as the more senior clerks rotate in and out of the schedule taking vacation time.
Read more: Is your produce department summer fresh?
That is an extended explanation and clear recipe for shrink.
What’s a produce manager to do? Focus less on what you can’t control and more on what is within your control.
First of all, a produce manager should focus on maximizing sales. Don’t be afraid to build the mass displays. Order expecting the best quality and sales, not fearing the worst of either, or you’ll be out of business. Carry as many fresh produce items as you can to give the “Yes, we’re in the produce business!” impact on your customers.
Read more: Beat the summertime blues
But what about the shrink that this creates?
I have learned two things about our focus from Karen Caplan, CEO of Frieda’s Inc.
“There’s good shrink, and there’s bad shrink,” she once said.
Good shrink is when a produce manager surrenders a few cases during a week as samples.
This is a minimal investment in sparking sales, especially with new or unfamiliar produce items. Good shrink is also regularly carrying a full line of specialty produce. Give it a try. You’ll get lots of comments from your customers who share compliments of your store as “the produce stand that has everything!”
Read more: Produce summer lovin’
The shrink from all-out specialty investment? Less than 1% when carrying minimal backstock.
So where does excess “bad” shrink originate? Mostly from incomplete training, writing hasty, inaccurate orders, neglect in storing product out of temperature, or overlooking invoice-billing mistakes. Or from mis-rotation, either in the back room or not faithfully rotating displays every stocking trip.
Some shrink is inevitable. Excess shrink can be avoided, given careful, focused steps.
Armand Lobato works for the Idaho Potato Commission. His 40 years’ experience in the produce business span a range of foodservice and retail positions. E-mail him at [email protected].