According to several reports, one grocery chain is fighting hard to keep stores open despite rampant shoplifting and an uptick in violence forcing many retailers to leave major cities across the country.
Giant Food, which operates 165 supermarkets in D.C., Maryland, Virginia and Delaware, has taken multiple measures to combat theft and keep stores safe. That includes limiting store entrances; hiring security guards; restricting the number of items at self-checkout stands; putting less high-value items on shelves; and securing razor blades in containers that make noise if opened.
Company president Ira Kress said he’s seen theft rise at least “tenfold in the last five years” and violence increase “exponentially.” He hopes these measures will help keep stores open, even if they inconvenience shoppers. “The alternative is worse for customers. The last thing I want to do is close stores. But I’ve got to be able to run them safely and profitably.”
The issues being faced by Giant are also being faced by Target, Kroger, Albertsons, Nike, lululemon and many other retailers. Let me be clear – the issues are going to get worse. The steps being taken by retailers, such as installing plexiglass barriers on shelves throughout their stores or hiring security guards won’t work. According to Lakshman Lakshmanan, senior director in Alvarez & Marsal’s consumer and retail group, “We’re seeing the highest level of organized retail crime and theft ever.” To solve the problem of theft, retailers need to turn to technology.
Specific to Giant Food, I encourage Ira Kress, and the executive team at Ahold Delhaize and The GIANT Company, to accept reality and the reality is this: The stores that require the most security and that experience the highest levels of theft should be closed. The only obligation the company has is to itself to generate profits and provide a safe working environment. The immediate priority should be to close stores; this advice is for all retailers faced with the same issues as Giant Food.
Next, Giant Food and other retailers must accept another reality: Things are going to get worse and no amount of touchy-feely speeches or wishful thinking is going to change things. The only way to stay in business and grow is by reimagining the business model and process for meeting customer demand for groceries. I strongly recommend the following:
1. Install micro-fulfillment centers (MFC) and additional automation inside stores. Create reinforced glass dividers that separate all products from customers. Walmart recently opened a store using an MFC from Alert Innovation. H-E-B has installed MFCs from AutoStore™ inside multiple stores.
2. Leverage an app and/or kiosks for customers to place their orders for the items they want to purchase.
3. Install a row of Pickup Ports for customers to retrieve their groceries.
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