Shrinkage Losses Three Times Higher For City Markets
City Markets has faced “substantial” losses due to their inventory ‘shrinkage’ levels that are three times’ higher than international industry norms, reported Derek Winford, the company’s chief executive.
The company currently has a workforce of about 700 which may be affected as the company attempts to return to profitability by controlling and managing its operating costs. Mr. Winford said the loss of product due to theft, spoiling and other factors before it hits the shelves is a “daunting problem” facing City Markets.
“We know that ‘shrink’ should be in the range of 2 per cent or lower, but our ‘shrink’ size is about 6 per cent of sales. The cost to the company is substantial,” Mr Winford told Tribune Business in an e-mail.
“We have instituted much stricter inventory and financial controls, and are hopeful that this financial drain will be substantially reduced. Additionally, we have put in place an incentive programme for our employees which has been well received.”
Mr Winford said, “The demise of City Markets is not imminent. The company, just like many others enterprises, locally and internationally, is having to fight through hardships created by the meltdown of world economies and the impact upon all business sectors in the Bahamas.
“In addition to the difficulties caused by a poor economy, the company suffered a series of serious maintenance problems with refrigeration in a number of stores. I am now pleased to say that the problems have been corrected and we are back to normal. Further, to restore customer confidence in our business we are about to embark upon an impressive promotional campaign.
“On the question of the status of jobs for our employees, we have no immediate plans for reducing the workforce. However, as we continue to manage and control our operating costs, some employees may be affected.”
Mr Winford said, “We’re doing OK. We’re holding our own. The rumours don’t help, because people talk. We need help from the Bahamian public.”