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Bigger, better burger
kicks off summer
Shrink your shrink
John Nahas, a franchisee in the Los
Angeles area, encourages his managers to watch videos at work every
day. Not only that, he wants them to
do it openly and at high volume.
But these videos aren’t the latest
Hollywood blockbusters. They are the
surveillance tapes captured by the
closed-circuit TV system that Nahas
uses at his three ampm stations and
two ARCO-branded stations. And
they’re an invaluable tool in reducing
shrink, because those tapes record
the moves of employees as well as
customers.
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ing errors, combined, typically account
for less than 20 percent of inventory
shortage. The largest cause of inventory loss is employee theft.
How costly can shrink be? You
might be surprised. Let’s look at a
hypothetical example of one source of
potential shrink from employee theft:
grazing.
If each employee helped himself or
herself to a drink, a bag of chips and
a pack of cigarettes for a total of $7 in
product, what would that cost you per
year? If one employee does this five
days a week for the entire year, that
erages, smoking cigarettes or taking
lottery tickets without paying for
them)
• Sweetheart deals (giving friends
and family discounts or not ringing up all their purchases)
• Theft of merchandise, cash or
time (stealing products or cash,
wasting time or submitting hours
not actually worked)
Techniques for reducing
employee shrink
So what can you do to reduce
employee shrink? BP Retail Security
Advisor Rosie Gill offers some
techniques.
Photo by Dan Tuffs
John Nahas operates ampm locations in Los Angeles, Arcadia and Huntington Park, Calif.
“It only takes about a half-hour each
day,” says Nahas, who employs
between 50 and 60 people at his franchises. “By watching [the tapes] with
the volume on high, for instance,
which makes it obvious what we are
doing, our employees know that we
are watching.”
The cost of shrink
Nahas, a 20-year veteran of the gas
station and c-store industry, knows
that shrink (also known as shrinkage)
is one sure way to erode profits.
Inventory shrink — the loss of
either merchandise or cash — comes
from employee theft, customer theft,
vendor fraud and accounting errors.
However, according to the BP Retail
Management Training program, customer theft, vendor fraud and account-
adds up to about $1,800. If you have
eight employees, that’s more than
$14,000 annually.
For this reason Nahas believes that
investing a bit of time watching a tape
pays off in the long run.
Types of employee shrink
Shrink can happen through many
forms of employee theft, some
obvious and some not so obvious.
Employee theft can occur by:
• Under-ringing (having the customer
pay the correct price, but ringing up
a lower price and pocketing the difference)
• Using the “no sale” key to open
the drawer (allowing the employee
access to the cash)
• Grazing (eating food, drinking bev-
• Know whom you are hiring.
Screen potential applicants —
including running background
checks, if necessary — before
putting them on your payroll.
• Maintain a zero-tolerance policy.
Make sure employees know the
consequences for theft, from termination to possible prosecution.
• Run regular trend reports and
analyze them. Become familiar
with what is typical for each shift,
day, week and season.
• Monitor clerk statistics. Look for
trends or anomalies in voids,
returns, overrides and no-sale
transactions.
• Count cigarettes and lottery
tickets regularly. Get in the habit
of doing daily cigarette and lottery
reconciliations, or make it a
routine part of the checkout
procedure at the end of each shift.
• Keep an eye on noninventory
product such as sugar packets
and sandwich-making supplies.
Grazing employees can take
profits home in their bellies.
• Do random cash audits and till
checks. Perform weekly cash
audits for each employee, as well
as nonscheduled daily cash audits
and till checks.
• Stop by the store unexpectedly.
Employees are less likely to steal
if they know you can show up at
any time.
• Rotate shifts. Look for changes in
sales between employees working
the same shift. For example, if
sales spike or plummet during a
shift staffed by a different employee, consider investigating.
For more information on controlling shrink, contact your franchise
business consultant.
Do you have any tips, tricks or
techniques you’d like to share
with other franchisees? If so, send
us an e-mail at [email protected].
Besides its homemade look and
taste, the new burger boasts the
following mouth-watering features:
• Quality. The hamburgers are all
beef.
• Size. The burger is 25 percent larger
than the old patty.
• Weight. The hamburger patty
weighs 2.5 oz., postcook; other
hamburger purveyors generally
highlight precooked weights. The
double-cheeseburger meat patties
are 5 oz., postcook, as opposed
to similar products that weigh a
quarter pound (4 oz.).
Burger lovers savored free samples
of the new cheeseburger at ampm
locations on the West Coast as
well as in Chicago, Atlanta and
Indianapolis on two days in June.
Radio ads in those markets invited
consumers to sink their teeth into
the new cheeseburger at lunchtime
(between 11 a.m. and 1 p.m.).
And during June and July, the
double cheeseburger sold for a
suggested retail price of $1.59 at
participating locations.
‘We decided that it was
time for a change to better
meet what customers
were looking for.’
— Tom Terlecky
The tongue-twisting nickname
for the hamburger came out of market
research. When asked to choose
from different product descriptions,
consumers chose the “bigger, better”
phrase for the new burger. Sales of
the previous version of the burger
were respectable; 1.6 million burgers
were sold from May 1, 2007, to April
30, 2008. However, ampm wanted to
improve its burger category, and the
hamburger’s formula hadn’t changed
since 1993.
Customers familiar with the old
ampm hamburger will also discover
more tempting packaging for the
burger. Hamburgers, cheeseburgers
and double cheeseburgers now sport
colorful graphics.
“We decided that it was time for a
change to better meet what customers
were looking for,” Terlecky explains.
“Hamburger popularity is extremely
high, and no other convenience store
does hamburgers well.”
SUMMER2008
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