ECR- Dublin, Ireland The Kroger Company
About Kroger • + 500k Employees • 11 million customers daily • 2,759 retail food stores • $ 100B sales (70% Center Store, 30% Fresh) • 44 Distribution Centers • 38 Manufacturing Plants Supermarkets Multi-Department Price-Impact Warehouse Marketplace Fuel Centers (1423) Fine Jewelry (251)
Fresh Departments – Root Cause of Shrink Kroger is Evolving LP to AP • Loss Prevention and Shrink were 2 teams • Combined to 1 team = Asset Protection • Identified where shrink comes from • Aligned AP efforts • One way of working • Leverage field AP for support
Partnership Collaboration AP & Merchandising Drive Sales • Struggled creating synergies with Merchants • Identified a Leadership Gap Sell Fresh • Focus on culture of collaboration • AP partners with Reduce Shrink Merchandizing on shrink (sales too!)
Grocery Shrink Task Force Needle Moving Projects • Dairy Excellence Guide • FCB Inventory Guide Grocery Shrink Trend • Markdown Guide • Bread Excellence Guide • DSD Exception Reporting • Walk them to the bulls eye Last Year This Year
Produce Buyer Distributions Measuring & Fresh Produce Distributions Period 8 Accountability Produce WK1 WK2 WK3 WK4 PD 8 2019 0.89% 0.78% 0.93% 1.00% 0.90% Goal 1.02% 1.02% 1.02% 1.02% 1.02% Difference -0.13% -0.24% -0.09% -0.02% -0.12% • Buyers distributing product -12.8% -23.5% -8.8% -2% -11.8% % Chg vs. Goal when warehouse is long *Note: Distributions is a % of total cases shipped • Excessive buyer distros impact shrink Meat • Minimal reporting or accountability Fresh Meat Distributions • Development of weekly reporting Period 8 Meat WK1 WK2 WK3 WK4 PD 8 • Established goals by Division and Buyer 2019 0.32% 0.41% 0.41% 0.49% 0.38% • Means to measure and Goal 0.99% 0.99% 0.99% 0.99% 0.99% accountability Difference -0.67% -0.58% -0.58% -0.50% -0.61% -67.7% -58.9% -58.6% -50.5% -61.6% % Chg vs. Goal *Note: Distributions is a % of total cases shipped
Deli Fresh Prepared Space/Sales & SKU Rationalization • Shrink is an opportunity • Conducted a review • Divisions provided Day’s of Supply feedback • Space to sales updated • SKU rationalization completed in all stores • Improved shrink Last Year This Year
Sell More, Sell Fresh, Shrink Less Produce Case Pack Sizes Shrink, Sales, and Freshness • Analyzed by item data • Reviewed sales, shrink, and day’s supply • Identified qualified items • Partnered with Produce Merchandising • Produce working with growers • Reduce case packs
Evigence Pilot Floral Department • Piloting in January 2020 • Testing on Tulips • Heightened awareness • Freshness and quality • Impact on sales (more) • Freshness sensor on the package • Sensors change color as temperature changes • Impact on shrink (less) • Higher the temp, faster it changes • Sensors can be calibrated to match the perishability of product • Will indicate an action of “pull the product” – regardless of pull date • Identifies opportunities with behaviors
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