Reducing Shrinkage and Stockouts in a Food Retail Store

Abstract

Lean thinking is transforming the traditional way of a retail business operates to new and more effective practices. In particular, the food retail business is facing previously unseen challenges which require daily operational excellence to meet them with success. Low productivity, high variability in task completion, lack of work planning should be faced with daily relentless improvement actions. Kaizen, the continuous improvement pillar of Lean, needs to be seen not only as a methodology but also as a philosophy, a vision that needs to be written on everyday actions and personified by each individual. This paper describes an improvement event in the fresh food markets, specifically in the cold meat section, meant to decrease the shrinkage rate as well as the number of out-of-stock (OOS) situations. The methodology adopted followed the seven-step problem-solving procedure provided by the A3 thinking tool.

Effects of physical stock loss on the financial performance of retail enterprises

“…Considering the findings identifying stock spoilage as the biggest contributor to profitability loss, this study is in line with that of a study investigating stock shrinkage and stockouts in retail stores wherein Marques and De Carvalho (2021) revealed that stock spoilage is one of the largest contributors of stock shrinkage. Results explain the financial losses retailers suffer because of expired stock.…”

On-Shelf Availability (OSA) and Firm Performance: The Moderating Effects of Lean Practices in Retail Industry

“…OSA ensures that products sought by consumers are present on the shelf and in a saleable condition, whereas outof-stock (OOS) refers to the unavailability of specific products (Marques & Carvalho 2021;Bottani et al 2017). In this study, OOS was considered as an indicator of poor OSA.…”

“…Phantom stock, a negative form of OSA, occurs when the inventory tracking system indicates the presence of a product that is no longer physically available. The reasons for a product not being visible on the shelf include being in a consumer's cart but not purchased, out of stock, or stolen (Marques & Carvalho 2021;Milella et al 2020). Previous research has identified various dimensions of stock availability, OSA as determinants of retailer firm performance (FP) (Schleper et al 2021;Tarigan et al 2020;Avlijas et al 2018;Moussaoui et al 2016).…”