Department upkeep and shrinkage control

Abstract

Purpose – The strategic nature of the fresh fruit and vegetables (FFV) department for supermarkets and hypermarkets is unquestioned. Yet both practitioners and researchers have difficulty optimizing its performance. The purpose of this paper is to identify the key specific drivers of the performance of FFV departments with a special attention being paid to the deterioration of product quality. Design/methodology/approach – The authors used a two-step inductive modelling process relying on interviews with experts from within the sector and a multiple case study of four FFV departments belonging to a French retail brand. Findings – After highlighting that the deterioration of product quality on the shelves is a key particularity of FFV departments, the authors identify department upkeep and shrinkage control as key intermediate variables impacting the performance of FFV departments and show how these two parameters can be controlled using three main actionable levers: marketing, in-store logistics and procurement. Research limitations/implications – The discussion of managerial implications sheds light on other phenomena requiring further investigation: team management practices, the buying role of the department manager and tailored criteria for assessing performance. Practical implications – The research shows managers that optimizing department upkeep allows turnover to be generated which exceeds the sector average without impeding the productivity of the department. The authors stress that it is imperative to control shrinkage in order to meet margin performance objectives. Originality/value – This research is a step forward because it takes account of the elements distinguishing FFV from other fresh products to highlight the factors underlying high performance levels.