Business insights. Баутина И.В - 20 стр.

2. While reading.
a. These phrases summarise the main idea of each paragraph. Read the text and
match each phrase with the correct paragraph.
a) 'Shrink school'
b) Deterrence
c) Hard to ignore
d) Collaboration
e) Retailing, on the face of it, tends to be a straightforward business.
f) On the inside

                              Retail's shrinking feeling
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Buy cheap. Sell dear, and plenty. Keep costs down. Do it right, and come home with
a profit. But even the best retailers are doing well if they make a margin that goes
much beyond a single-digit percentage. Consider what they are up against. There is
competition. There is the fickle taste of customers. And then there is the steady 2%
or so of sales that drips away each year through what the trade, euphemistically,
calls "shrinkage" - and what the rest of us would simply call theft.
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So keep the shoplifters out and the profits will benefit?
If only that were so.
In fact, shoplifting only accounts for 40% of the shrinkage problem, according to
Philip Payne, director of professional services at loss reduction consultancy Intelliq.
"Stores often end up spending millions on closed-circuit television, store detectives
and so on - all to tackle a minority of the losses," he says.
Another small slice disappears in simple mistakes by staff, often the result of
practices and systems that are badly designed and over-complicated.
3
But the biggest problem is leakage from within.
At the most basic level, there is the cashier with a hand in the till: relatively easy to
spot, and to root out.
Then there are the more advanced cases, which happen when front-line staff either
find ways of gaming the store's systems and processes - or managers do the same,
often making significant amounts of money in the process.
4
And even if you do catch a thief - whether insider or shoplifter - what recourse do
you have?
You can sack a member of staff, but they could easily get a job somewhere else - a
problem moved, rather than solved, in a business where staff turnover is traditionally
sky-high.

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