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© 2010 Larry Miller, LAM Consulting, Inc.
RERE--FOCUS & REFOCUS & RE--LOAD FORLOAD FORRERE--FOCUS & REFOCUS & RE--LOAD FORLOAD FOR
Presented by:
Larry MillerThe Retail Control Group
www.RetailControl.com
FMI presents…
© 2010 Larry Miller, LAM Consulting, Inc.© 2010 Larry Miller, LAM Consulting, Inc.
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© 2010 Larry Miller, LAM Consulting, Inc.
The Unfortunate Truth
We have spent the last 20 years trying to:
Catch Vendor Theft at our Back DoorsCatch Cashier Theft at our Front DoorsCatch Shoplifters with our DVR’s, EAS and …Track, Analyze and Fractionalize to the smallest detail every pattern and blip…
It’s Time To:Re-FOCUS on the Real “Profit Drivers”
© 2010 Larry Miller, LAM Consulting, Inc.
Corporate Retail ExperienceStarted as a bagger, then night crew, Produce Manager, FE manager, Store Manager, District
Manager of 16 stores, Area Director of 52 stores, VP of Operations 160 stores.
Independent Supermarket Owner/Operator
Software Entrepreneur & AuthorCreator of ShrinkTrax and SmartStore
Ernst and Young 2000 EOY Award Winner
3 Books, 116 Articles and 14 White papers
Today:I Teach Retailers to GROW PROFIT
LARRY MILLER
CONTACT: 602-448-8500
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© 2010 Larry Miller, LAM Consulting, Inc.
Installed Best Practices
© 2010 Larry Miller, LAM Consulting, Inc.
Shrink Vs. Profit?
Half Empty?
Half Full?
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© 2010 Larry Miller, LAM Consulting, Inc.
What is Shrink??
The difference between the retail value of product received and the amount received for that product at the time of it’s sale.
© 2010 Larry Miller, LAM Consulting, Inc.
Where’s the Shrink?
Shoplifting 28%
Cashier-Caused 24%
General Employee
25%
Receiving 7%
Pricing 4%
Acct’g 4%
Damage8%
2.27% Average
Just 38% of available shrink for recovery.
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© 2010 Larry Miller, LAM Consulting, Inc.
Creating PROFIT!
7.4565% of LP Pros rate their effectiveness in Combating Shoplifting, Employee and Vendor Theft at 7.45.
© 2010 Larry Miller, LAM Consulting, Inc.
BEST LP Thinking
1. 62% of your shrink is from Operations. 2. 38% of shrink comes from Shoplifting,
Receiving, Employee and Cashier Caused.3. Focus on Inv Controls, Turns & “Conversion”4. Measure Known Loss.5. Learn, Teach, Collaborate and FOCUS!
SHRINK IS LOST PROFIT.So… Let’s talk “PROFIT”!
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© 2010 Larry Miller, LAM Consulting, Inc.
Where's The Shrink?
Theft 36%Operational
59%
© 2011 National Supermarket Research Group - Preliminary
© 2010 Larry Miller, LAM Consulting, Inc.
Operational
Employee Caused 9%
Damage 4%
Production Planning 10%
Rotation 7%
Product Handling
9%
Known Loss 14%
© 2011 National Supermarket Research Group - Preliminary
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© 2010 Larry Miller, LAM Consulting, Inc.
Non-Operational
Shoplifting 13%
Vendor3% General
Employee 9%
Cashier Caused 11%
© 2011 National Supermarket Research Group - Preliminary
© 2010 Larry Miller, LAM Consulting, Inc.
Facts & Stats
Best-In-Class GOALS:
• Total store shrink = 1.20% of sales. • Perishable shrink = 18% less than industry av.• Vendor Theft = 16% less than industry av.• Cashier Theft = 32% less than industry av.• Top 20% of Store Managers have 26% less store
shrink than peers.• Top Companies have written Operating STANDARDS
and active LP and Store Manager collaboration.• Use Total Store Manager Best Practices.
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© 2010 Larry Miller, LAM Consulting, Inc.
What’s Your Inside BRAND?
Narrow or Broad?Isolated or Collaborative?Total Store or Just Parts?Theft – Catch – Secure or PROFIT EMPOWERING?
© 2010 Larry Miller, LAM Consulting, Inc.
The BIG Opportunity
• Only 14% of LPM’s are actively involved in Perishable Shrink Prevention.
• Only 18% are actively involved in Grocery Shrink Prevention Best Practices.
• Just 26% are actively involved in store-wide Known Loss Control Best Practices.
COMBINED: We are missing optimal control of 58% of Store‐wide Shrink Loss.
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© 2010 Larry Miller, LAM Consulting, Inc.
Shrink by Department
“Best-in-Class” practices can improve
profit by 18%
6.27%
5.53% 4.76%
1.29%
5.01%
© 2010 Larry Miller, LAM Consulting, Inc.
Creating PROFIT!
Reducing SHRINK 18% produces the same bottom
line PROFIT as would an 22% Increase in Sales.
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© 2010 Larry Miller, LAM Consulting, Inc.© 2010 Larry Miller, LAM Consulting, Inc.
Now Imagine:
1818%%LOWERLOWERSHRINKSHRINK
© 2010 Larry Miller, LAM Consulting, Inc.
Now Is The Time!!!
• Engage the Boss in a BOLD, NEW Way. • Expand your Reach and Impact.• Raise the Profile of Loss Prevention.• Getting more VISIBLE.• Create Your Loss Prevention Profit Center.
It’s a Matter of: VALUEChange your Value Proposition and You Will Get BETTER FOLLOW‐THRU, EXECUTION and RESULTS.
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The
Relentless Pursuit of
Better!© 2010 Larry Miller, LAM Consulting, Inc.
Your Challenge…Your Challenge…
© 2010 Larry Miller, LAM Consulting, Inc.
“You Can’t Catch Your Wayto Lower Shrink”
- Larry Miller
Lesson #1
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© 2010 Larry Miller, LAM Consulting, Inc.© 2010 Larry Miller, LAM Consulting, Inc.
Now:
It’s Time To Think
BIGGER
© 2010 Larry Miller, LAM Consulting, Inc.
“The ideas presented in this session may cause a CHANGE in your thinking and lead to radical
profit improvement.”
A Warning To Our Younger Viewers
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© 2010 Larry Miller, LAM Consulting, Inc.
3 BIG IDEAS:
1. Focus on PROFIT. How to be EXPERT PROFIT MAKERS and PROFIT COACHES!
2. 5 Key Programs. This is an evolutionthat unfolds over a 9 month period.
3. A Total FOCUS ON PROFIT.Driven by YOU the Leader..
© 2010 Larry Miller, LAM Consulting, Inc.
THE BIG IDEA!!!
YOU WANT PROFIT:1. Start with a serious look at your current
practices to see what is / isn’t working.2. Begin a “Process Of Change” – an
EVOLUTION – to permanently impact your PROFIT FOCUS!
3. EDUCATE! TRAIN! COACH TO SUCCESS! 4. Build-in Sustainability!
Think Like a Total Store Manager
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© 2010 Larry Miller, LAM Consulting, Inc.© 2010 Larry Miller, LAM Consulting, Inc.
FOCUS ON PROFIT IMPROVEMENTFOCUS ON PROFIT IMPROVEMENT
PRODUCE
MEATSTORE
Increase Profits
Reduce Shrink
20%
0%
-20%
Increased PROFITS
Reduced SHRINK in Less Than 120 Days
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© 2010 Larry Miller, LAM Consulting, Inc.
What Prevents LP?
Because Manager’s Don’t Know How To Fix It.
© 2010 Larry Miller, LAM Consulting, Inc.
Let’s Talk “Profit Realization”
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© 2010 Larry Miller, LAM Consulting, Inc.
““Acres of Acres of DiamondsDiamonds””
© 2010 Larry Miller, LAM Consulting, Inc.
“Raise Your Expectations”
Excellent PROFIT MAKING and Shrink Control Only Comes With
BIGGER Expectations. - Larry Miller
Lesson #2
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© 2010 Larry Miller, LAM Consulting, Inc.
YOUR JOB #1 is:
PROFITRealization
© 2010 Larry Miller, LAM Consulting, Inc.
PROFIT and…
It’s an AttitudeAttitude and an ExpectationExpectation…
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© 2010 Larry Miller, LAM Consulting, Inc.
Your #1 Offense
“The Total Store Manager”1. New Knowledge & Focus (Sales, Sanitation, Shrink)
2. Consistent Visibility & Presence (StoreWalk)
3. New Attitude of Support (not catch)
4. The “Coach”: Vision, Teamwork, Direction.5. New, Clear Standards & Expectations6. New Quantifiable Goals
He is “A Man With A Plan”!
New for 2011
© 2010 Larry Miller, LAM Consulting, Inc.
New Expectations
1. Executives MUST Open Their Minds to More Effective Standards, Systems & Practices.
2. Store Manager’s MUST Learn and Use The TOP 5 Best Practices That Cause Profit.
3. Everything Is Measureable.
4. Profit Realization Comes from Store Operations-centric Loss Prevention
5. You Can’t Catch Your Way to Lower Shrink!
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© 2010 Larry Miller, LAM Consulting, Inc.
Re-FOCUS & Re-LOAD
For 18% New “Profit Realization”
Follow These 5 BOLD, FRESH PROGRAMS
© 2010 Larry Miller, LAM Consulting, Inc.
Total Store Manager 5 Best Practices
1. StoreWalk – Twice each day, “on-purpose”!
2. Smart Inventory Control – The Rule of 3 and programmed inventory turns for Cash Flow/ Freshness, Damage Control and Shrink Control.
3. Backroom Organization & Sanitation –Wall-to-wall and “deep into corners”.
4. Known Loss Control – Reason “why” management awareness and adjustment.
5. Cashier Performance Management –for CSE and Shrink Control.
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© 2010 Larry Miller, LAM Consulting, Inc.
“12 Standard Disciplines” How to “Coach” Their Teams
to Consistently Success.
© 2010 Larry Miller, LAM Consulting, Inc.
The Profit System
““12 12 Profit RealizationProfit Realization” Best Practices & Standards
1. A disciplined StoreWalk© Standard and Practice.2. Backroom security, inventory control and organization.3. Inventory Turnover Goals by Department. (Perpetual Inventory)4. Cashier KPI’s and Targeted Goals.5. Empty Perishable Coolers on Receipt of Delivery.6. Cutting Lists and Production Planning.7. 9am Perishable Readiness / 6pm MIC Perishable Walk8. Loss Prevention Night Visitations9. Store Manager Loss Prevention Checklists10. Sanitation Standards & Practices11. HR/LP Training, Orientations, “The Coaching Culture” 12. Customer Service
© 2011 Larry Miller, LAM Consulting, Inc.
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© 2010 Larry Miller, LAM Consulting, Inc.
Train or Re-Train…
1. Managers need to understand their Business “Profit Drivers”.
2. Managers to “see” and “feel” their “Profit Drivers”.
3. Managers must know their vital Shrink Control and Profit Making #’s.
4. Managers must learn to “Coach For Profit”.5. Train Managers & Supervisors must learn to
Lead their Teams to PROFIT.
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© 2010 Larry Miller, LAM Consulting, Inc.
7 Loss Prevention BP’s
1. Teach employees to prevent Shoplifting with excellent customer service.
2. Continue current physical security, analytics, Policies and Controls. Just differently.
3. Get engaged in Operational Shrink Control.4. Focus on Inv Control, Turns & Conversion.5. Measure Known Loss and Investigate WHY?6. Promote “Think Shrink” Collaboration and
PROFIT HUDDLES.7. Conduct Single Topic Briefings at Manager Mttgs.
© 2010 Larry Miller, LAM Consulting, Inc.
Walk Your Store “
Twice a Day!
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© 2010 Larry Miller, LAM Consulting, Inc.
The Store Manager's DAILY StoreWalkConducted By The Store MIC Each Day at 8:00a and 4:00p
EveryDay Thursday Notes & Comments
ALL AREAS:All Adv Items Available for Sale x x
Actual-to-Planned Labor / Adjust? x x
Sales Readiness x
Discuss Today's & Tomorrow's Plan x
PERISHABLES (30 minutes)
Sales Floor Rack Check
Freshness "Touch" Check - All Racks x
Approve Space Allocation x x
Advertised Item Check x
Proper Signs In Place x
Displays Level & Presented x
"Smell Check" All Areas x
Displays Set for 12-hour Sell Thru x x
GROCERY BACKROOMSExcess Backstock Controlled (7%) x
All Exit Dooor Seals Controlled x
Wall-To-Wall Swept and Picked-up x
Backstop of Current Adv Items? x
Test All Exit Alarms x
Sight Check All Service Rooms x
Sell or Xfer 20 Pieces of Old Stock
StoreWalk™
Managers must be taught to “see” beyond the tactical and be “purposeful”
© 2010 Larry Miller, LAM Consulting, Inc.
Merchandising:Complete audit of (order guide) purchases to sales. This determines if what we are ordering is being
produced in proper amounts so as to display all required products for proper GM% mix andwhat is actually selling. Additionally: Quantities being ordered and stored are in‐line with anticipated sales. Verify the following:
Questions: Comments: Value: Score:
• Proper items are being ordered for smart merchandising and productivity and turnover.
• Required varieties of pre‐packaged items are being ordered and displayed for sales.
• Required varieties of produce are being ordered and displayed for sales.
Inventory:Review of last 2 monthly physical inventory reports. This is to look for evidence of inventory manipulation or mal‐practice. Verify the following:
Questions: Comments: Value: Score:
• Look for variances in quantities between months and correlation between what was ordered, scaled/produced, and sold.
• Order guide review: Is it apparent that full variety ordering is occurring so as to assure maximum productivity, product variety and mix, etc.
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© 2010 Larry Miller, LAM Consulting, Inc.
So; What to do…
For the next 8 Weeks?
1. Commit to a formal, consistent SW every day, twice a day. – SEE-THINK-TAKE ACTION…
2. Talk Shrink Reduction for PROFIT Realization at every WEEKLY Store Manager meeting.
3. Talk Shrink Control Awareness and Prevention to EVERY new hire.
4. FOCUS ON PROFIT!
© 2011 Larry Miller, LAM Consulting, Inc.
© 2010 Larry Miller, LAM Consulting, Inc.
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© 2010 Larry Miller, LAM Consulting, Inc.
Having great produce isn’t enough
Having a great meat department isn’t enough
Having great perishables isn’t enough
Having great customer service isn’t enough
You must have cost and loss controlsthat produce strong margins - with broad and deep customer satisfaction.
Lesson #3
© 2010 Larry Miller, LAM Consulting, Inc.
Perishable Shrink
Meat Seafood Deli Produce Dairy Floral Bakery
Overall Shrink 4.86% 4.92% 5.98% 5.02% .82% 6.24% 6.05%
Employee Theft (non‐cashier) 12% 9% 15% 11% 11% 19% 24%
Cashier Theft and Errors 20% 12% 15% 21% 16% 13% 15%
Receiving / Damaged 3% 9% 6% 6% 10% 9% 5%
Pricing / Scan File Errors 7% 11% 11% 8% 7% 7% 6%
Shoplifting 23% 20% 22% 12% 18% 14% 11%
Over‐ordering 12% 15% 9% 15% 12% 16% 7%
Improper Handling / SpaceAllocation / OverproductionThrowaways
23% 24% 22% 27% 26% 22% 32%
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© 2010 Larry Miller, LAM Consulting, Inc.
8 Best Practices To DRIVE Perishable PROFIT
© 2011 Larry Miller, LAM Consulting, Inc.
© 2010 Larry Miller, LAM Consulting, Inc.
PROFIT DRIVER #1
1. Everything Starts With A Smart Order.
17% of Perishable Shrink can be traced to faulty Ordering. Smart orders are written to meet anticipated sales and display requirements.
Efficient Turnover = LOWERS SHRINK!
Reduce shrink up to 17%
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© 2010 Larry Miller, LAM Consulting, Inc.
Order to Produce This
© 2010 Larry Miller, LAM Consulting, Inc.
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© 2010 Larry Miller, LAM Consulting, Inc.
© 2010 Larry Miller, LAM Consulting, Inc.
2. Practice “The Rule of 3”.
Order perishables for 3 days anticipated sales and sell at full value what you receive within 3 days.
Improve Freshness & Quality and Reduce shrink by 8%
PROFIT DRIVER #2
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© 2010 Larry Miller, LAM Consulting, Inc.
TSM Controlled Cooler
© 2010 Larry Miller, LAM Consulting, Inc.
TSM Controlled Coolers
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© 2010 Larry Miller, LAM Consulting, Inc.
Following These Best Practices Produces
1. Lower Shrink.2. MORE PROFIT!3. Fresher Product for Sale4. Higher Customer Satisfaction5. Improved Productivity & Morale6. Cleaner Store and Work Areas7. Customer Service Excellence
© 2010 Larry Miller, LAM Consulting, Inc.
“Shrink Control and Customer Satisfaction Begins HERE”
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© 2010 Larry Miller, LAM Consulting, Inc.
TSM Controlled Backroom
© 2010 Larry Miller, LAM Consulting, Inc.
TSM Controlled Backroom
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© 2010 Larry Miller, LAM Consulting, Inc.
TSM Controlled Backroom
© 2010 Larry Miller, LAM Consulting, Inc.
PROFIT DRIVER #3
3. Turn-over Storage Inventory.
A tell-tail sign of a department under control is an organized, code dated storage cooler.
Every Manager MUST understand the importance of Inventory Turn-over.
Reduce shrink by 7%
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© 2010 Larry Miller, LAM Consulting, Inc.
Excellent Backroom & Cooler Control Will Reduce Shrink By 12%
© 2010 Larry Miller, LAM Consulting, Inc.
TOP PROFIT THINK
1. Receive it fresh.
2. Keep it Fresh. Refrigerate.3. Produce only to meet demand.4. Minimize compression under weight
5. Sell it! Sell it soon after receipt.
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The Total Store Manager Total Store Manager Effect
PRODUCE
MEATSTORE
Increase Profits
Reduce Shrink
20%
0%
-20%
Increased PROFITS
Reduced SHRINK in Less Than 120 Days
© 2010 Larry Miller, LAM Consulting, Inc.
Larry Miller’s
8 Indisputable Laws
8 Indisputable Laws of Loss Prevention
1. The Law of Consistency… managers must focus on the 4 S’s of Supermarket Success to bring higher profits.
2. The Law of Expectation… you must balance between past and future expectations and have a clear LP vision.
3. The Law of Standards… set clear store performance standards to set the stage for your success.
4. The Law of Execution... an ounce of (preemptive) prevention is worth more than a pound of (reactive) cure
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© 2010 Larry Miller, LAM Consulting, Inc.
8 Indisputable Laws of Loss Prevention5. The Law of Inspection…effective auditing is the circular,
repeatable process that triggers shrink reduction.
6. The Law of Change…C-level change management and choosing the right strategic partner will help you sustain changes that build profits
7. The Law of Collaboration…and how corporate-wide cooperation will turn failure into success – Evolve or Die !
8. The Law of Accountability…and how everyone MUST be accountable for their role in creating your winning loss control culture -- and it all starts with YOU !
Larry Miller’s
8 Indisputable Laws
© 2010 Larry Miller, LAM Consulting, Inc.
TOTAL STORE MANAGER
PROFITABLE SELLING
YOURBRAND
Customer ServiceExcellence
ProfessionalStore Supervisor
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© 2010 Larry Miller, LAM Consulting, Inc.
“Profit RealizationProfit Realizationis a team sport…”
- Larry Miller
Lesson #8 – The New Loss Prevention
© 2010 Larry Miller, LAM Consulting, Inc.
The RESULTS?
Company 1: (22 Stores)
CASH FLOW $1,050MGROCERY SHRINK 12%PERISHABLE SHRINK 34%
Company 2: (37 Stores)
CASH FLOW $840KGROCERY SHRINK 16%PERISHABLE SHRINK 23%
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© 2010 Larry Miller, LAM Consulting, Inc.
See Actual Case Study RESULTS in Your Pass-out Package.
Then; Chose The Training Program That’s Right for YOU!
© 2010 Larry Miller, LAM Consulting, Inc.
“If it is to be, it’s up to me”
- Larry Miller
Final Lesson:
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The
Relentless Pursuit of
Better!© 2010 Larry Miller, LAM Consulting, Inc.
COMMIT to…COMMIT to…
© 2010 Larry Miller, LAM Consulting, Inc.
REMEMBER…REMEMBER…
If you continue to do what you have always done…You will continue to get what
you always got.
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© 2010 Larry Miller, LAM Consulting, Inc.
Learn How To Grow Your PROFIT As A
Total Store Manager®
Company
For GUARANTEED PROFIT…
Contact Larry Miller at 602‐448‐8500
© 2010 Larry Miller, LAM Consulting, Inc.
NSRG presents
THE NATIONALSUPERMARKET SHRINKSURVEY FOR 2011.
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