In most cases, shrinkage stems from inefficient stock and margin control. Spinnaker Software has developed various features in its Arch Retail System to help prevent shrinkage, and to maximise profits in butchery operations. Some of the most common reasons for shrinkage are:
- Under-scaling/Sweethearting, where staff adds additional goods after the item was weighed and the label printed;
- Margin control – in South Africa’s volatile economy meat prices change often, which requires butchers to review their selling prices more frequently and proactively;
- Inaccurate sales information: Sales quantities have to be recorded correctly for stock reduction and profit calculations.
To eliminate under-scaling, a weight verification system was developed, which uses an in-line POS scale, (a small low-cost scale, which is connected directly to the POS). When scaled items are scanned by the operator in a sales transaction, the system will prompt the operator to weigh the item on the POS scale, where the system will then read the actual weight of the item from the scale, and compare it to the scanned weight (selected products unknown to cashiers, set up by management). If the weight doesn’t match, supervisor intervention is required to authorise the transaction. The system also allows for a threshold to be configured to eliminate small differences due to packaging etc.
The ability to react quickly to market forces is critical in today’s competitive retail market. To achieve this, a volume and value based meat index price/margin calculator was developed, which is fully integrated with the POS and stock control system. This allows merchants to effortlessly calculate selling prices across all cuts for various animals, whilst it also accommodates various processing configurations for different classes or yield configurations – is usually determined by the targeted consumer segment.
Inaccurate Sales Information:
Most butcheries with scanning systems use the EAN 13-barcode to label and scan goods. The scale produces a label with a barcode that embeds the item code and value (value = unit price x quantity). The quantity or weight cannot be included due to the 13-digit limitation, which means the POS needs to calculate the quantity (quantity = value/system price). This method often results in inaccurate quantity calculations when the system selling price of an item is changed without relabelling all pre-labelled goods. To prevent this, Spinnaker has developed in conjunction with some of the leading scale system providers in South Africa, the ability to use the latest barcode technology to bridge this shortcoming.
David Geldenhuys, Marketing Executive Officer, commented as follows: “The above software developments are in line with Spinnaker’s ongoing strategy to enhance product features aimed at improving retail efficiency