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Ryan McRorie

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December 20, 2011

4 Tips To Keep “Inventory Shrink” From Making Profits Smaller

December 20, 2011 | By |

Inventory ShrinkageEvery month your restaurant spends thousands of dollars buying food. More than likely, it’s the second largest expense on your balance sheet after labor. And every month, that inventory of food products might be “shrinking,” meaning a percentage of it is disappearing due to either unintentional waste or very intentional theft.

When you’ve got thousands of dollars worth of inventory, even a tiny percentage of shrink can mean big money off the bottom line. Unfortunately, simply trusting employees, especially when turnover rates are so high, is not an acceptable option. A much more effective strategy for minimizing shrink is “trust, but verify.” Some tips:

  • Use clear trash bags. A common tactic used by employees who steal is to stash inventory in trash bags and recover it later after their shift is over. Other employees may simply be throwing perfectly usable product away without realizing its value. Either way, you’re losing money. Clear trash bags make it easy for you to spot product that should be in the walk-in instead of the dumpster.
  • Audit the trash. Even though this doesn’t sound like a particularly appealing strategy, regularly going through trash and auditing the contents will help you catch and prevent both intentional (deliberately taking food product) and unintentional (mistakenly tossing usable food product) theft. Using the clear trash bags will make this task much easier.
  • Ban backpacks and other personal bags from the kitchen. Ideally, set up an employee changing room with shelving or lockers where your staff can leave their personal belongings while they are working. If you don’t have such a room, ban backpacks anyway. Otherwise you’ll have no way of knowing what’s coming out of your inventory and landing in the bags of your staff. And not knowing simply isn’t good enough when you’re a restaurateur trying to survive this economy.
  • Break down cardboard boxes. The old boxes that food product comes in is another popular way for thieves to move your inventory out of your kitchen. Luckily, the solution is easy: have staff break boxes down before taking them outside. That way there’s no chance that product is leaving in boxes.

If you do encounter intentional employee theft, make sure you have some strategies in place to deal with it. In the case of unintentional waste, make sure you use examples of waste to educate your entire staff on how you want food product used and disposed. Taking the time to train staff and emphasizing the importance of completely using product rather than discarding it can translate into some significant savings for your restaurant.

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