According to the 2015 National Retail Security Survey, inventory shrink averaged 1.38 percent of retail sales in 2014, resulting in the loss of $44 billion. With each passing year it seems as though shrink statistics for retailers become even bleaker than the last.

2. 2
1.9%
Stock Loss KPI - Percentage decrease in shrinkage value (pilferage,
process, loss, damage. Shrinkage not to exceed 0.5% of Sales
Findings High Shrinkage across the country at to
Sales at Retail 1.8%
First Round of Stocktakes conducted for Max KSA From Sept to Dec
15

3. How do we correct this
3
Analyze Stock
Audit Results at
Group,
Department and
Class level
Conduct Root
Cause Analysis
to Identify the
Reasons for the
Losses
Create Action
Plan for Each
Cause that is
Measurable
(SMART)
Principle

4. Stock Take Losses Summary @ Mid of Dec 2015
4
 Stock variance loss is -1.91% which higher as compare to last year stock take i.e. -1.1% variance.
 Total financial cost value is 14 M which higher than the last FY.
 Total Loss Units are less than LY.
Last FY Current FY
Var % -1.10% -1.90%
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
Variance %

5. – Stock Take Losses Summary - Group Wise
Summary
• 93% of total stock was scanned in all the stores.
• Three Non Apparel Groups – White Box , Q-bay & Accessories are
contributing 36% to overall shrinkage.
• Non Apparel loss is at 56% to total store loss
• Cosmetics has the highest shrinkage of 15% .
• 64% of all losses comes from Feminized area
0
1
2
3
4
5
3.75
0.99
4.07
0.02
0.81 1.1
2.54
1.98
3.79
1.49
3.38

6. High Shrinkage – What Went Wrong
Store Controls Compliance Infrastructure/Resource
People
Stock loss
Measurement
No Staff Search
Lack of proper tagging
Proper De-tagging not happening at
cash till
No locker searches
No control on exits
No checking of items going out of
the store
No fitting room controls
No spot audits at tills
Not following goods
receiving SOP
Pull out SOP not followed
Staff reservations still happening
Poor control on staff purchase
Poor control on cash control
Lack of back store compliance
Poor control on store damages
Poor control on cosmetic billing
Lack of Proper tasking of security
guards (instructions)
Lack of adequate CCTV cameras
In adequate detaggers in selected
stores
In Secure cosmetics storage
Lack of vigilance at
fire exits
Lack of staff planning
Lack of staff training
Lock of proper ROTA planning
Lack of a culture of Disciple
Lack of communication
Lack of SM Knowledge
No incident reporting
Lack of vigilance & focus on stock
loss awareness
Store Management not checking all
areas of the store
Lack of customer service awareness
Team not fully aware of the stock loss
results
No LP health checks by store
managers
Poor BOE results
High Negative inventory
No tracker on Refunds
No regular PI for Acc and cosmetics
Poor/No monitoring of CCTV

7. 7
On analysis of data 5 zones were identified that are highly prone to
shrinkage and major losses occur from here
Receiving
and Back
Area
Sales
Floor
Staff Area
Cash
Desk
Entrance
& Exit

8. 5 SLAP Zones
Staff
Area
Entry/
Exit
Cash
Desk
Sales Floor
Receiving and Back
Area

9. 5 SLAP Zones
Receiving and
Back Area

10.  Accurate receiving- 100% receiving at pack level and 20% at item level
 All ASN discrepancies to be highlighted and followed up with WH
 Cosmetics to be received at item level
 Check for all DAMAGE on arrival. Focus on Home, Toys, Q Bays and Accessories
 Testers/ gifts to be controlled as per the new SOP
 Shop to Shop transfers to be received at piece level
 Pull Outs-Season wise, department wise segregation
 Tagging- 100% tagging as per the guidelines
 House keeping standards maintained
 No staff reservations
 Each store to have a back store controller
 Stocks to be kept only in the stock room
 No shopping bags to be used by staff

11. Entrance
Receiving Bay Hanger Zone Footwear
Ladies
Hanging
Ladies Lingerie
Kids
Hanging
Kids Kids
AccessoriesNon-Trading
Toys
Q-
Bay
HomeDamages
Returns (Pull
outs)
Processing area

12. Back Store Arrangement
 Principles to be followed while layout
 Enough Aisle space
 Space between floor and 1st Shelf – 20 cm
 Space between Top shelf and ceiling – 1 mtr
 Demarcated areas for receiving & processing
 Each group to have dedicated area, Separate Zones for basic/NOOS products
 When designing racks, hanging area can be on top and folding shelves on bottom
 In case of multi-level stores, the layout to be aligned to groups present on the floor
 No Exits to be blocked , Demarcated Damage Area
 Handcopy of the layout to be pasted on the wall
(A3 size Laminated to be mounted on the back store wall so that it is visible to all)

13. Tagging Guidelines
Revised Tagging Policy - Apparel
 All items Sr 30 and above to be tagged with hard tags as 38% of losses happen within the SR 30 to 50
bracket
 Return items to be tagged and returned to the sales floor within 1 hour
 Ensure that delete and cancelled should also be tagged
 All Value packs to be tagged on the top of the pack (Under garments packs, Infant basics packs)
 All single Bra’s to be tagged
Accessories
 All items SR 30 and above to be hard tagged
 All Jewelry, watches and sunglasses to be tagged using loop tags
Footwear
 All Footwear SR 30 and above to be tagged with hard tags
 All Wallets and ladies hand bags to be tagged using loop /hard tagged

14. Tagging Guidelines
Luggage
 Every piece of Luggage to be tagged using a hard tag (All sizes within a set to be tagged)
 BTS bags to be hard tagged
 Security to maintain a record of all luggage sold in a register with following details bill no, cashier id, no
of pieces sold
Home
 All items SR 30 and above to be hard tagged
 Fitted sheets, Quilts & Blankets, Comforters, Filled Cushions, Soft Toys, Curtains must be hard tagged
due to high losses
Q-Bay
 All tag-able Merchandise need to be tagged e.g. Socks. Bags Neck pillows
Tagging Compliance Check
• Daily focus to check tagging compliance per group, as per the schedule below, Staff and security will check
these areas for untagged items

15. 5 SLAP Zones
Sales Floor

16.  Acknowledge every customer through greeting,
make customer feel that you are around through
Engagement
 Never leave sales floor un attended – Proper ROTA
/ Zoning Coverage
 Awareness of high shrinkage items – Department
wise
 Report any suspicious customers behaviors to
management & Security.
 Review your department for missing barcodes and
security tags as per guidelines
 Trail Room Controls - Follow Trail Room Process
 No mobile phones on shop floor
CONTROL MEASURES

17. Trial Rooms Controls
 Security to be present near to the trial Room.
 Not more than 5 garments to be allowed at any given time per
customer
 Security/staff to count the garments and give a token specifying the
number of garments
 When the customer exits the trial room the garments to be counted
and checked
 Tried garments to be cleared every 1 hr, in case of higher volume
every 30 mins
 Trial room mirror edges to be sealed with silicon for preventing of
hiding labels and tags
 No Storage of any Merchandise/ Non Trading is allowed in the trial
rooms

18. • Accessories
• Tagging as per policy
• Ensure Staff presence
• Out Posting of Accessories to be visible
• Cosmetics
• Staff to be present, In case staff is not available cosmetic
counters to be kept closed
• All cosmetic counters to have a cash till.
• Store where cash till is not available, the staff to handover the
selected products in a sealed acrylic box to the customer for
billing
• Customer to handover the box to the cashier who will break the
seal and post billing handover the products to the customer

19. Monitor High Shrinkage Zones
• Tester Control Process
• The Cosmetics Stocks must come in Separate ASN brand wise
• The Testers must not be part of the Cosmetics Stocks ASN
• Separate ASN for Cosmetics Testers must be sent along with Delivery
Driver
• The Testers ASN must be cross checked and In warded in SIM as the price
is 0.01 Sr.
• Proper Tracking of the Testers must be done ‘One Brand One Tracker’
using a Tester Tracker (format in the next slide)
• Once the Testers finish replacement must be done through Store
Managers Approval after Nullifying the old Testers in system
• The Copy of the Tester that is billed in the system need to be kept for
further analysis
• The Vendor must not provide any Testers from his side to the store as a
replacement it must be routed through the Warehouse only
• All Testers must carry the label as Testers

20. 5 SLAP Zones
Staff
Area

21.  Staff reservations NOT ALLOWED
 Mobile phones and personal belongings to be kept
in LOCKERS
 Lockers to be cleared and kept OPEN on
completion of your shift
 No use of Max Shopping bags for personal use /
storage
 Random locker searches to be done
 Stock Loss Results Awareness in the team
CONTROL MEASURES

22. 5 SLAP Zones
Cash
Desk

23.  Never leave Cashier Area unattended
 DO NOT Share YOUR User ID / Password
 DEACTIVATE all security tags
 Check for matching pairs of shoes
 Check for possibility of item inside another item e.g.
Luggage
 Check that the item matches the barcode
 Match the number of scanned items with invoice.
 Maintain your cash desk clean and clear
 Personal cash to be declared
 Personal cash and belongings to be kept in the lockers
 No loose barcodes / Universal Barcodes / Active Shukran
Cards
 Check for items inside merchandise
 No Staff Reservations
 Managers verification of the return items v/s Report
 Return shopping bags to be cut
CONTROL MEASURES

24.  Spot Audits of Cash Tills
 AM/SM/Auditors to do the following spot check at the till
 Cash Checks / Returns Verifications
 Delete/void transactions to be checked and physically verified everyday by the SM
 Transaction checks (Check items billed to physical item qty before the goods are handed
over to the customer)
 User id checks (No sharing of user id is permitted)
 Store Manager to do a random check of the CCTV to monitor if the process is being
followed
 Spot checking of the bills v/s physical items by the security in high risk stores
 Daily Chief Cashier Sign Off for
 Product
 Barcodes
 Cash Counters

25. 5 SLAP Zones
Entrance/Exit

26.  Ensure Staff search process is followed for all the
staff / visitors.
 Ensure De-Tagging of every merchandise
 Beeping- Track the cashiers IDs and coach them
 Ensure emergency exit should be clear from
merchandize or garbage.
 Monitor Emergency exit doors (usage of plastic
seals)
 Ensuring garbage is checked under a CCTV
camera in transparent bags.
 Random checks of purchase dockets at the exit.
 Sealing of all customer bags entering the store
 Stamping of customer bills at the exit
CONTROL MEASURES

27. Staff Search
 All staff, parcels & bags to be searched every time they exit the store
 Females to be searched in the staff room by female security/ female supervisor
 Males to be searched near the exit (discreetly), Preferably in the view of a CCTV camera
 For mall stores where receiving bay is away from the store, search to happen for every exit
 Staff Bags to be checked as a part of the search
 All searching is compulsory and not to be done at random
Control on Emergency Exits
• All Fire exits to be kept closed using a Numbered Plastic Seal. Latest serial no to be maintained in the
control sheet. Control sheet to be placed in a sleeve on the door
• All Fire Exits to be locked with a Pad lock during non trading hours
• All fire exit passages to be free of any stock, Fittings etc.

28.  Garbage Disposal
 Garbage disposal to happen during the Morning hours before the store opens for trade
 Garbage to be disposed using clear/transparent Bags
 All Garbage moving out of the store to be checked by Security & Store Manager/Senior Staff
(dual control)
 Used cleaning water (for Mopping) also needs to be checked while it is moved out of the
 All cardboard boxes to be flattening and sent back to the warehouse along with a GTM
 All Garbage to be checked under the CCTV and AM’s to review the recording during there

29.  Incident reporting
 Mandate to be issued on Incident reporting
 Every incident that is noticed need to be reported. Given below is the Guideline/Type of incident to be
 Store finding cut price/ soft tags
 Any case of attempted/shop lifting caught
 All incident reports to be marked to Retail Auditor/ AM/ CM / ROM depending on the reporting structure
the region
 Store Management not checking all areas of the store
 Identify all possible blind spots in the stores, these to be checked at regular periods
 All fire exits/ stair cases to be checked twice a week (in case it is locked), everyday in case it is open
 LP Health Checks by Area Managers/Retail Auditors
 Monthly LP check each for every store
 Corrective actions to be taken as per defined timelines to plug the GAPS
 Stores not compiling with the same to be disciplined

30.  BOE results
 Retail Auditors to conduct once a Month BOE check for all the stores
 All BOE result to be followed by time bound Action Plan
 Non Compliance of BOE to be corrected immediately
 Stores not achieving ‘Satisfactory’ mark on the BOE to be disciplined, leading to even the harshest
measures
 Refunds Tracking
 All cash refunds to be done by entering a valid reason in the POS
 SM to review the Refund report on a daily basis to check any abnormalities and sign the report
 CCTV Monitoring
 Random CCTV monitoring to be done by the SM on a daily basis, A minimum of 1 hr of monitoring to
done at intervals
 All monitoring to be supported by log entries

31.  Negative inventory
 Negative inventory details to be shared with the stores on a bi-monthly basis
 All negative inventories to be cleared by Finance for system correctness
 PI for Accessories and Cosmetics
 PI schedule for Accessories to be implemented
 Once a month PI to be done for each cosmetic brand
 Mystery shopper