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Don't Shrink Your Profits—Share the Produce

Mark Mulcahy, Human Resources Team

April 24, 2008

3 Min Read
Don't Shrink Your Profits—Share the Produce

Produce Perspectives

Every retailer experiences some sort of shrink or loss in the produce department—you know, produce that is still good but not quite up to par to sell at full margin. Where shrink comes from and how it's handled can differ among produce departments.

But common to all departments are some basic solutions for minimizing shrink. For example:

  • Take time to develop consistent quality standards.

  • Spend time on receiving and thoroughly check what's coming in the back door.

  • Be a detective. Notice on a weekly basis which items end up on your shrink logs or in your reduced bins. Gather clues so you can recognize patterns and adjust your ordering accordingly.

  • Recognize that time is money and spend time efficiently, handling your shrink as little as possible. To facilitate this, put separate bins on your stocking cart for cull, markdown, deli and compost.

  • Have your crew reduce as they go. When shrink is dealt with in a timely manner you have the best opportunity to put it to its best use.

  • If you are going to sell it, price it so it will be gone by the end of the day.

  • Don't let your reduced product or markdown area reflect poorly on your department. Display items there as well as you do in any other section of the produce department.

Creative Thinking
Creative thinking can strengthen the value your customers perceive in buying your reduced product. Shane Towne, produce manager at Bloomingfoods Market and Deli in Bloomington, Ind., labels his store's reduced items "produce for your meal today." His crew pairs items that can be used together in a meal and sells them for about half price.

The store's relationship with a local restaurant helps too. Each day, Bloomingfoods gathers whatever doesn't sell after reduction and saves it in the walk-in cooler. The restaurant's chef comes by, takes what he can use in his meal preparation that night and leaves behind coupons for free meals for the store manager and staff.

Deli Connection
Many produce departments have an almost adversarial relationship with the deli, forcing the deli to use what doesn't sell. Although many deli managers welcome shrink for creative cooking—not to mention the boost that such recycling gives the store's bottom line—it's important that neither department feels taken advantage of.

Give the deli a heads-up when you know you've got an unusual quantity of tomatoes about to go off, so they can start thinking in terms of sauce instead of slices. Or let them know that apples have slowed and they could think about making pies. Of course they can try their own version of the famous "musgo" soup that Ever'man Natural Foods in Pensacola, Fla., sells, featuring everything the produce department casts off.

Food Bank
Your culled or shrink produce can benefit the larger community too. Make a connection with your local food bank, as both Bloomingfoods and Ever'man have done. The Hoosier Hills Food Bank visits Bloomingfoods six days a week to take anything that's been pulled. Ever'man gives its shrink to the Manna Food Bank and to the Waterfront Rescue Mission, which serves breakfast and dinner to the homeless each day.

Some retailers also see a tax break for the amount of product they donate.

Turning Garbage Into Gold
Whatever Bloomingfoods can't sell, give to the restaurant or donate to the food bank goes into a well-orchestrated compost program. Area farmers fill collection bins with the store's produce scraps nearly every day of the week.

I hope others will follow in the footsteps of these and other innovative retailers to lower shrink and simultaneously enhance community wealth.

Mark Mulcahy runs an organic education and produce consulting firm. He can be reached at 707.939.8355 or at [email protected].

Natural Foods Merchandiser volume XXIV/number 10/p. 30

About the Author(s)

Mark Mulcahy

Human Resources Team, CDS Consulting Co-op

Mark Mulcahy is an award-winning retail consultant, educator and organic advocate. He is a member of the CDS Consulting Co-op, which provides consulting for co-ops and independent retailers worldwide. With more than 30 years in the organic produce industry, Mulcahy is well known for his creative merchandising, effective training techniques, passion for produce, successful financial strategies and dedication to sustainable agriculture. He is the co-creator and co-presenter of Rising Stars, a leadership development course for retailers, and is co-host the national radio show, An Organic Conversation

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