StORES Magazine - September 2007 - (Page L6) NEWSbeat The Rap on Shrink F YOU THINK your competitor up the street has a bigger problem with shrink than your own organization, you may want to think again. A research report, published in July by the Loss Prevention Research Council, finds that only 10 percent of the more than 100 major U.S. retailers polled characterize their shrink as “high” relative to their competitors. Nearly twothirds (65.5 percent) believe their store’s shrink is “average”; 24.5 percent are convinced their annual shrink is “lower than average.” Still, retailers’ perception of the shrink problem is likely to be out of sync with what may actually be happening – in their stores as well as those of the competition – because there is no standard method for measuring shrink. Some 42.9 percent of respondents said their companies I measure shrink "at cost"; 57.1 percent report that their companies measure shrink "at retail price." "Our research indicates [that] retailers often believe shrink isn't a serious problem for them,” says Read Hayes, director of the Loss Prevention Research Council, “but it's a major issue that retailers measure their shrink differently. They use so many different minute calculations regarding product pricing and distribution center levels. And if you compare apples to oranges, you are likely to obtain illogical results.” Hayes advocates a move toward standardization, preferably using the retail price method. According to the report, 86 percent of responding retailers spend the most or second-most time working on LP issues related to internal product theft; 62 percent spend the most or second-most time working on loss problems related to internal cash theft; 32 percent spend the most or second-most time working on external theft, including organized retail crime. The study, sponsored by IntelliVid, targeted a sample of U.S. retailers from multiple segments, including mass merchants, department stores, pharmacy/drug stores, apparel, grocery and specialty stores. New Database Debuts OUR COMPANY has decided to open stores in a new market. The choice of location has been narrowed to two possible venues. Now Y Courting Consumer Concern ecent product contaminations and recalls, coupled with confusion over marketing claims, have contributed to an erosion of confidence in consumer product manufacturers, according to the IBM survey of 1,676 consumers in the United States and the U.K. Nearly 70 percent of consumers expressed a low overall level of trust in the claims “branded food products” make about their environmental impact and health and wellness benefits. Almost half of consumers are more concerned about safety, and nearly two of every five consumers said they buy different brands today because of these concerns. Nearly 60 percent of respondents said they have more knowledge about the contents of the food they buy now versus two years ago. Yet, despite this increased awareness, 72 percent want even more information about the source, the production methods and the contents of the packaged food products they buy. R L6 STORES / SEPTEMBER 2007 WWW.LPINFORMATION.COM http://WWW.LPINFORMATION.COM
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