Department upkeep and shrinkage control

Abstract

Purpose – The strategic nature of the fresh fruit and vegetables (FFV) department for supermarkets and hypermarkets is unquestioned. Yet both practitioners and researchers have difficulty optimizing its performance. The purpose of this paper is to identify the key specific drivers of the performance of FFV departments with a special attention being paid to the deterioration of product quality. Design/methodology/approach – The authors used a two-step inductive modelling process relying on interviews with experts from within the sector and a multiple case study of four FFV departments belonging to a French retail brand. Findings – After highlighting that the deterioration of product quality on the shelves is a key particularity of FFV departments, the authors identify department upkeep and shrinkage control as key intermediate variables impacting the performance of FFV departments and show how these two parameters can be controlled using three main actionable levers: marketing, in-store logistics and procurement. Research limitations/implications – The discussion of managerial implications sheds light on other phenomena requiring further investigation: team management practices, the buying role of the department manager and tailored criteria for assessing performance. Practical implications – The research shows managers that optimizing department upkeep allows turnover to be generated which exceeds the sector average without impeding the productivity of the department. The authors stress that it is imperative to control shrinkage in order to meet margin performance objectives. Originality/value – This research is a step forward because it takes account of the elements distinguishing FFV from other fresh products to highlight the factors underlying high performance levels.

Improving Operational and Sustainability Performance in a Retail Fresh Food Market Using Lean: A Portuguese Case Study

“…In fresh products categories, "Perishability" is the biggest concern of food retailers, not only because it negatively affects the customer perception of quality, but also because of the monetary loss it creates [15]. Perishable products account for over 40% of sales in grocery chains [1], and, with factors such as a limited lifetime, high safety and quality requirements, and short lead time, they are requirements that are highly complex to manage [29].…”

“…There have been some approaches joining the operational and sustainability perspectives in the retail sector, but the research trend is still emerging [13]. Examples include the improved use of technology [14], the inclusion of shrinkage as a variable for optimization [15], or the promotion of sustainabilityoriented management [16,17]. However, clear descriptions of the methods used to join the sustainability and operational performance improvement in the retail sector-especially those based on real cases-are still scarce.…”

Reducing Shrinkage and Stockouts in a Food Retail Store

“…It is curious to note that high inventory levels make instore logistics more prone to execution errors, causing shelf stockouts [19] and higher risk for product shrinkage [20]. In fresh products categories, product deterioration is the biggest concern of food retailers, not only because it negatively affects customer perception of quality but also because of the monetary loss it creates [21]. There are a number of examples of Lean improvement initiatives found in existing literature.…”

Effects related to dimensions of purchasing decision quality of vegetables and fruits at grocery stores in Slovenia

“…Among extrinsic attributes, country of origin was ranked as second most important, after price. Saucede et al (2014) analyzed the factors influencing a vegetable and fruit department's store performance. The two identified factors were: adequate marketing (assortment, promotion, thematisation, product presentation techniques, display, space allocation, and organization) and department upkeep (presentation and cleanliness, consistent and homogenous quality, and absence of shortfalls).…”