Virginia Alcoholic Beverage Control is taking steps to address theft from its stores — both shoplifting and theft by employees — though ABC said loss of inventory, or retail shrink, remains low.
ABC operates 339 retail stores, as well as a distribution center.
Virginia ABC’s shrink was just 0.2% in fiscal 2021, compared to an average among all retailers in the country of 1.4%, as calculated by the National Retail Federation.
That still added up to more than $2.8 million in inventory. ABC said shrink declined in fiscal 2022 to 0.112%, or $1.5 million, and it said shrink is projected to remain low in fiscal 2023.
To address distribution center and retail store shrink, ABC is instituting more frequent inventory checks, additional audits of stores and developing better ways to categorize shrink sources.
“Retail shrink is inventory that isn’t sold to customers,” Pat Kane, an ABC spokesman, said. “It could be due to damage, process failures, or it could be due to theft by either employees or members of the public.”
Kane pointed to the National Retail Federation’s 2022 survey that found retail shrink is a growing trend across the nation’s retail industry. While ABC’s shrink numbers are low compared to the overall retail market, Kane said they are working to deter and detect theft at local stores.
“We’ve got a great relationship with local law enforcement,” said Kane. “Staff are trained to gather usable suspect information and leads to help those local officers in their investigations.”
This spring, ABC conducted inventories at its distribution center and 394 stores, with 158 of those stores short of recorded inventory. At its distribution center, it counted more than 1 million cases and 42,000 individual bottles, which found more than 99.9% of the distribution center’s inventory accounted for.
To further deter theft at retail stores, it will minimize how many high-theft products are placed on shelves, move products for maximum visibility by staff and add additional in-store staff. It will also add more in-store cameras.
Kane said ABC has budgeted for two loss prevention staffers who will focus on establishing a loss prevention strategy, developing processes, and initiating continuous monitoring activities, to improve loss prevention.
To address employee theft, it is reviewing internal inventory processes and increasing store audits, which fell during the COVID-19 pandemic. It has also identified a point-of-sale system vulnerability.
A review of 1,100 transactions at 134 stores found suspected theft at seven stores. Three employees at one store were charged and ordered to pay restitution, with six stores still under investigation.
The National Retail Federation calls items most frequently stolen “CRAVED” merchandise, which stands for concealable, removable, available, valuable, enjoyable and disposable. Retail items frequently targeted include electronics, health and beauty products, toys, and tobacco.
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