Bashas’ Uses Better Shrink Controls to Improve Gross Margins

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Capgemini collaborates with a leading Arizona grocery retailer to refine its business model, resulting in reduced costs and risks, and enhanced customer satisfaction

“ Our Team, working jointly with Capgemini, was able to achieve our objectives through a pragmatic systematic implementation of new concepts, processes and measurement tools. ”Mike Proulx, President and COO, Bashas

The Situation

Established in 1932, Bashas’ is a family-owned grocery store chain located in Arizona, with over 150 stores in four distinct formats: Bashas’, Bashas’ Diné, AJ’s Fine Foods and Food City.

Bashas’ needed to reduce its shrink exposure by enhancing inventory control systems and Direct Store Delivery (DSD) practices. It looked to Capgemini to help with these challenges as well as monitor front-end transactions and perishable shrink controls.

The Solution

Capgemini worked with Bashas’to develop an inventory control program based on average weekly Point of Sales (POS) movement. POS and DSD parameters and procedures were tightened so that fraudulent activity was reduced and controls for shrink improved. Perishable department shrink controls such as markdown procedures and a product identification program were put into place to further increase efficiency.

The Result

The non-perishable inventory reduction program has helped Bashas’ to improve its ordering procedures and out-of-stocks, while dramatically reducing inventory holding costs.  Tightening backdoor receiving (DSD) controls and front-end transaction monitoring has improved Bashas’ risk management procedures. Significant savings occurred from reduced vendor discrepancies and fraud exposure. Additional benefits from the project include: increased productivity, improved space allocation, and enhanced customer satisfaction.