SHRINK

[ClownLoach]

https://finance.yahoo.com/news/best-buy ... WeWjVKSdQB

Exactly!

Well, except for the fact that they changed their entire strategy and format. They had moved to a zero lock up program years ago, every laptop computer box, camera, etc. was customer accessible. They put all the cages back, lockups back, and put backroom storage back. Now they're remodeling stores and expanding the backrooms even further so they take up a quarter to a third of the building and adding pickup counters as they recreate the late, famous electronics industry leader in shrink, Circuit City who secured everything and fired managers for getting over 0.40% shrink (I am dead serious). I should mention that the backroom model is actually a labor savings too, less planograms to set, less labor to stock sales floors. Just a handful of people unload the trucks and put all the boxes into their pallet racking where they're not touched again until they're sold. No need for daily restocking of the sales floor and recovery processes and such. Usually just one person in the warehouse, and if they need help loading a big box they page an available floor worker to help.

So maybe Best Buy had the foresight to predict the shrink problems today and secure themselves against it? Because there is absolutely no resemblance between what Best Buy looked like in the early and mid 2010s versus today from a security perspective. They've locked down the stores like a bank vault and just keep adding security.

And they've already closed 15% of the chain, nearly all of the closures being in higher shrink areas.

The reason they added workers is because they slashed so many last year and this year that they were losing sales to Amazon and Costco because they were so bare bones that they had a wait for hours to just get a cashier to ring up a TV that's in the back room. So they forced the customer to buy online which usually translated to no sales of the high profit cables, warranties, mounts, installation services, etc. that are the only thing that keeps the store open since the margins on the electronics themselves are less than 5% while the add ons are 90% profit.

They didn't add staff to prevent shrink. They are also finishing the process of fully outsourcing their entire delivery department as well as Geek Squad service and installation businesses to 3rd parties. So basically they've slashed staffing more than ever this year.

They are so reckless and incompetent at the C-suite that they have executed the same layoff programs of all their best salespeople three times in the last decade. Circuit City did it once and they are still in business school textbooks over it. Best Buy keeps repeating the same staffing and business model mistakes, expecting a different result every time.

They need to offer Hubert Joly a "blank check" to return and save the company, again. Unlike Howard Schultz and Starbucks, Joly's services are so desperately needed to right the ship that I could see the liquidation of this $50 billion a year company occurring in the next 5 to 10 years. They have an overreactive C-suite that makes massive scale changes to every aspect of the business model every few months or years in an effort to portray their worth to Wall Street who unfortunately doesn't have any other national competitor to compare them to. Massive, expensive and costly changes do not work in a low margin business dependent on offsetting loss leaders with high profit add-ons.

Really misleading article.

Thank you for clarifying.

I was most interested in the more "customer service reducing shrink" narrative which I very much believe in.

I agree wholeheartedly about customer service reducing shrink. One of the issues I used to battle was the sharp pencil finance guys who would quickly adjust the payroll budgets down to compensate for a bad inventory, especially if it was a mid-year count. I don't know how many times I said the phrase "self fulfilling prophecy." The finance guys want to reset the P&L and offset losses, instead of recognizing that you can quickly establish a percentage of how much shrink will go up when payroll goes down. It never pencils out yet they will still try to cut payroll anyway.

I am just very cynical of Best Buy and their suspect operations. They must have had friends in the media that they paid to write the absolute worst stories about Circuit City, Comp USA and others, but they are hands down the worst operator the electronics industry has ever seen. That's why I love to call them out on their BS. Make no mistake about it, they still have far less customer service staffing than a year ago and they laid off all of their best/most experienced/full time sales people earlier this year. Where have we heard that before? The CEO and C-suite should be fired for the incredible disposal of costly training and development. They were the last company that still was spending on good training for their key people and they would milk their vendors for product training meetings and such at their expense, only to turn around and dismiss all the recipients of the training. So there's probably several hundred million dollars of training in just the last few years that has been disposed of, along with the average store losing literally several centuries of knowledge and experience.

They've done nothing to increase customer service, quite the opposite since Joly left. The shrink reduction narrative at Best Buy as explained is a complete farce as it has been accomplished entirely through physical security cages, glass cases, and reestablishing stock rooms and pickup counters. Even the video games are color copies of the box in cases and all the actual product is behind the registers now in locked cabinets. They're just sniffing around for positive PR when they've employed all the least desirable solutions from a customer perspective.

[ClownLoach]

Stater Bros new and remodeled stores, including the new Ontario store opening in two days, have all been adding a large bank of self checkouts (about 6) and reducing to 6 full service lanes. They do a good job staffing the self checkouts and always have two cashiers to assist.

They have a major remodel underway for the Temecula Pkwy location which is a old 1995 Albertsons conversion, and it's another "tear out to the rafters and wall studs" project that I was told today won't be complete until July 2024 (!!!).

One change has occurred however starting in Temecula; they are not going to add self checkout even though when done the store will otherwise match the new prototype for Stater Bros. They have a reconfigured front end I haven't seen before with 6 full service checkstands and 4 mini checkout desks that are for ten items or less express lanes. All black color counters and finishes with new red flag shaped lamps in the classic art deco Stater font. They are not configured in such a way to accommodate self checkout hardware, and all the checkstands are the new final units for the remodel. So it appears Stater Bros short fling with self checkout may be ending after less than two years and about half a dozen stores.

[storewanderer]

Stater Bros new and remodeled stores, including the new Ontario store opening in two days, have all been adding a large bank of self checkouts (about 6) and reducing to 6 full service lanes. They do a good job staffing the self checkouts and always have two cashiers to assist.

They have a major remodel underway for the Temecula Pkwy location which is a old 1995 Albertsons conversion, and it's another "tear out to the rafters and wall studs" project that I was told today won't be complete until July 2024 (!!!).

One change has occurred however starting in Temecula; they are not going to add self checkout even though when done the store will otherwise match the new prototype for Stater Bros. They have a reconfigured front end I haven't seen before with 6 full service checkstands and 4 mini checkout desks that are for ten items or less express lanes. All black color counters and finishes with new red flag shaped lamps in the classic art deco Stater font. They are not configured in such a way to accommodate self checkout hardware, and all the checkstands are the new final units for the remodel. So it appears Stater Bros short fling with self checkout may be ending after less than two years and about half a dozen stores.

I think their cashiers are more efficient than self checkout...

Also if they were staffing 2 employees for 6 self checkouts there is no way the number of transactions going through there worked. They probably did some math and determined those 2 employees would process more customers both being at regular checkstands, than the 6 self checkouts processed.

I find it odd they are putting those mini counters in given this is a larger size store. Full size checkstands are a lot more efficient/easier to work with for all involved. Almost comes off like they are wiring for 4 self checkouts... but not putting them in... yet.

Albertsons LLC did this back in 2009 or whatever when they removed self checkouts- they installed those mini express lane type counters in place (with the existing wiring). They were black too.

[ClownLoach]

Stater Bros new and remodeled stores, including the new Ontario store opening in two days, have all been adding a large bank of self checkouts (about 6) and reducing to 6 full service lanes. They do a good job staffing the self checkouts and always have two cashiers to assist.

They have a major remodel underway for the Temecula Pkwy location which is a old 1995 Albertsons conversion, and it's another "tear out to the rafters and wall studs" project that I was told today won't be complete until July 2024 (!!!).

One change has occurred however starting in Temecula; they are not going to add self checkout even though when done the store will otherwise match the new prototype for Stater Bros. They have a reconfigured front end I haven't seen before with 6 full service checkstands and 4 mini checkout desks that are for ten items or less express lanes. All black color counters and finishes with new red flag shaped lamps in the classic art deco Stater font. They are not configured in such a way to accommodate self checkout hardware, and all the checkstands are the new final units for the remodel. So it appears Stater Bros short fling with self checkout may be ending after less than two years and about half a dozen stores.

I think their cashiers are more efficient than self checkout...

Also if they were staffing 2 employees for 6 self checkouts there is no way the number of transactions going through there worked. They probably did some math and determined those 2 employees would process more customers both being at regular checkstands, than the 6 self checkouts processed.

I find it odd they are putting those mini counters in given this is a larger size store. Full size checkstands are a lot more efficient/easier to work with for all involved. Almost comes off like they are wiring for 4 self checkouts... but not putting them in... yet.

Albertsons LLC did this back in 2009 or whatever when they removed self checkouts- they installed those mini express lane type counters in place (with the existing wiring). They were black too.

These are a completely new small checkout I've not seen at any grocery store, and the wiring/placement/configuration is nothing like Stater uses for self checkout. No way they could switch later without moving the rest of the registers that were just placed. This looks permanent. All the new counters, small and full size, are completely black which I don't remember seeing at the other recent remodel or new locations. You could only fit maybe two self checkouts in the spot. I wonder if the new Ontario store will actually have self checkout or not when it opens tomorrow. We have family that moved up there recently and it's pretty impressive how Stater is investing in the area and how they are diversifying their stores.

The Temecula Pkwy situation is odd, the big Albertsons does good volume and is better sited than the Ralphs which is one of only two in the entire valley (other being out in the fringes if Murrieta and serving a similar area of smaller communities nearby). If I had to guess they would try not to divest either, but if forced the Temecula Ralphs would have to go. Kinda going to make a mess there as the original Albertsons is the Stater, the planned Lucky-Savon became the new Albertsons, the new Albertsons will have to rebrand to Vons or Ralphs, and the Ralphs if divested will become Albertsons. All wind up as misfit toys, stores in the wrong building for their brand/format/layout. Shows once again why that merger should not happen.

[storewanderer]

These are a completely new small checkout I've not seen at any grocery store, and the wiring/placement/configuration is nothing like Stater uses for self checkout. No way they could switch later without moving the rest of the registers that were just placed. This looks permanent. All the new counters, small and full size, are completely black which I don't remember seeing at the other recent remodel or new locations. You could only fit maybe two self checkouts in the spot. I wonder if the new Ontario store will actually have self checkout or not when it opens tomorrow. We have family that moved up there recently and it's pretty impressive how Stater is investing in the area and how they are diversifying their stores.

The Temecula Pkwy situation is odd, the big Albertsons does good volume and is better sited than the Ralphs which is one of only two in the entire valley (other being out in the fringes if Murrieta and serving a similar area of smaller communities nearby). If I had to guess they would try not to divest either, but if forced the Temecula Ralphs would have to go. Kinda going to make a mess there as the original Albertsons is the Stater, the planned Lucky-Savon became the new Albertsons, the new Albertsons will have to rebrand to Vons or Ralphs, and the Ralphs if divested will become Albertsons. All wind up as misfit toys, stores in the wrong building for their brand/format/layout. Shows once again why that merger should not happen.

The question I pose is which of the 3 stores is the best for Kroger (consider experiences with Kroger outside of Ralphs...)? I actually think that big Albertsons/Sav-On combo store may be the best store for Kroger. Those combo stores aren't much different from a typical Kroger, Smiths, Frys, etc. The biggest problem I see with it is the lack of ability to put a branded fuel station into the parking lot but I wonder if they could squeeze a little 4 pump/8 fueling position thing out at the middle of their lot.

The Temecula Ralphs is a very nice store but just doesn't seem to do enough business. It might survive as a Save Mart. I notice Best Buy closed and I will be curious what that gets filled with.

[ClownLoach]

These are a completely new small checkout I've not seen at any grocery store, and the wiring/placement/configuration is nothing like Stater uses for self checkout. No way they could switch later without moving the rest of the registers that were just placed. This looks permanent. All the new counters, small and full size, are completely black which I don't remember seeing at the other recent remodel or new locations. You could only fit maybe two self checkouts in the spot. I wonder if the new Ontario store will actually have self checkout or not when it opens tomorrow. We have family that moved up there recently and it's pretty impressive how Stater is investing in the area and how they are diversifying their stores.

The Temecula Pkwy situation is odd, the big Albertsons does good volume and is better sited than the Ralphs which is one of only two in the entire valley (other being out in the fringes if Murrieta and serving a similar area of smaller communities nearby). If I had to guess they would try not to divest either, but if forced the Temecula Ralphs would have to go. Kinda going to make a mess there as the original Albertsons is the Stater, the planned Lucky-Savon became the new Albertsons, the new Albertsons will have to rebrand to Vons or Ralphs, and the Ralphs if divested will become Albertsons. All wind up as misfit toys, stores in the wrong building for their brand/format/layout. Shows once again why that merger should not happen.

The question I pose is which of the 3 stores is the best for Kroger (consider experiences with Kroger outside of Ralphs...)? I actually think that big Albertsons/Sav-On combo store may be the best store for Kroger. Those combo stores aren't much different from a typical Kroger, Smiths, Frys, etc. The biggest problem I see with it is the lack of ability to put a branded fuel station into the parking lot but I wonder if they could squeeze a little 4 pump/8 fueling position thing out at the middle of their lot.

The Temecula Ralphs is a very nice store but just doesn't seem to do enough business. It might survive as a Save Mart. I notice Best Buy closed and I will be curious what that gets filled with.

Best Buy had already been leased by Smart and Final before it closed, and Aldi is going next to the Home Depot that is next to the Albertsons. The Albertsons is a problem site, a curfew store and parking, ingress and egress is poor. Perimeters are poorly sized and smaller than the Ralphs offerings so would require a major remodel even though the layout is very similar to the standard Ralphs. The Temecula Ralphs is busier than the Stater Bros. Walmart is the King of Temecula Pkwy and that's why it was selected to get the flagship remodel even before that program was expanded. Also I'm 99% sure the Ralphs site is owned which changes all of the dynamics. The musical chairs bit shows how the merger is a horrific mess.

[ClownLoach]

And here we go with another giant crock of crap from the clueless news media.

https://www.cnbc.com/2023/12/19/target- ... earby.html

CNBC is shocked that some locations Target kept open are likely busier than ones they closed due to theft? Yes! That's the freaking point of business! When a store no longer makes money due to theft they close it! If a store has more cash flow from operations it gets kept open! So yes, a slower store getting hit a few times daily is more likely to become unprofitable than a big store getting hit more daily. Economy of scale. Cost leverage. This is a BUSINESS WEBSITE so I find it absolutely incredible that they don't understand these simple concepts taught in the first year business classes and not just to those with an MBA.

Once again they use the false assumption that every single time an item is stolen that there is a police report filed. Obviously to anyone on this board we all know that few if any shoplifting or theft incidents get reported to the police. Most police incidents reported are in conjunction with threats of violence or other such situations, while regular theft losses known or unknown are never reported. The comparison of police incidents filed by store to actual theft loss amounts is completely irrelevant. And of course there is no mention of dollars per reported incident. A store could only have a few incidents a day but they may be the full scale professional looting hits where they lose thousands of dollars at a time, while a busier store might be dealing with a few people running out the door every hour or so with a twelve pack of beer. Obviously the $50M a year store with the hourly run out of a few items can afford the loss but the $5M small format that has several full cart runs a day valued in the thousands can't stay open.

I am really struggling to understand how such ignorant reporting gets published. Obviously the store has a profit and loss statement, and they ain't posting it on the vestibule with this week's sales ad. What is the point of this garbage reporting?

[storewanderer]

And here we go with another giant crock of crap from the clueless news media.

https://www.cnbc.com/2023/12/19/target- ... earby.html

CNBC is shocked that some locations Target kept open are likely busier than ones they closed due to theft? Yes! That's the freaking point of business! When a store no longer makes money due to theft they close it! If a store has more cash flow from operations it gets kept open! So yes, a slower store getting hit a few times daily is more likely to become unprofitable than a big store getting hit more daily. Economy of scale. Cost leverage. This is a BUSINESS WEBSITE so I find it absolutely incredible that they don't understand these simple concepts taught in the first year business classes and not just to those with an MBA.

Once again they use the false assumption that every single time an item is stolen that there is a police report filed. Obviously to anyone on this board we all know that few if any shoplifting or theft incidents get reported to the police. Most police incidents reported are in conjunction with threats of violence or other such situations, while regular theft losses known or unknown are never reported. The comparison of police incidents filed by store to actual theft loss amounts is completely irrelevant. And of course there is no mention of dollars per reported incident. A store could only have a few incidents a day but they may be the full scale professional looting hits where they lose thousands of dollars at a time, while a busier store might be dealing with a few people running out the door every hour or so with a twelve pack of beer. Obviously the $50M a year store with the hourly run out of a few items can afford the loss but the $5M small format that has several full cart runs a day valued in the thousands can't stay open.

I am really struggling to understand how such ignorant reporting gets published. Obviously the store has a profit and loss statement, and they ain't posting it on the vestibule with this week's sales ad. What is the point of this garbage reporting?

Just the quality of reporting I expect.

This load of an article warrants no further comment.

I guess they do back up their assertions with actual crime data... poorly analyzed and not even understood by them... I will just shut up here.

[ClownLoach]

And here we go with another giant crock of crap from the clueless news media.

https://www.cnbc.com/2023/12/19/target- ... earby.html

CNBC is shocked that some locations Target kept open are likely busier than ones they closed due to theft? Yes! That's the freaking point of business! When a store no longer makes money due to theft they close it! If a store has more cash flow from operations it gets kept open! So yes, a slower store getting hit a few times daily is more likely to become unprofitable than a big store getting hit more daily. Economy of scale. Cost leverage. This is a BUSINESS WEBSITE so I find it absolutely incredible that they don't understand these simple concepts taught in the first year business classes and not just to those with an MBA.

Once again they use the false assumption that every single time an item is stolen that there is a police report filed. Obviously to anyone on this board we all know that few if any shoplifting or theft incidents get reported to the police. Most police incidents reported are in conjunction with threats of violence or other such situations, while regular theft losses known or unknown are never reported. The comparison of police incidents filed by store to actual theft loss amounts is completely irrelevant. And of course there is no mention of dollars per reported incident. A store could only have a few incidents a day but they may be the full scale professional looting hits where they lose thousands of dollars at a time, while a busier store might be dealing with a few people running out the door every hour or so with a twelve pack of beer. Obviously the $50M a year store with the hourly run out of a few items can afford the loss but the $5M small format that has several full cart runs a day valued in the thousands can't stay open.

I am really struggling to understand how such ignorant reporting gets published. Obviously the store has a profit and loss statement, and they ain't posting it on the vestibule with this week's sales ad. What is the point of this garbage reporting?

Just the quality of reporting I expect.

This load of an article warrants no further comment.

I guess they do back up their assertions with actual crime data... poorly analyzed and not even understood by them... I will just shut up here.

Crime data in number of reported incidents, which once again is always an apples to oranges to bananas comparison across three different stores. This might be hands down the most poorly researched set of false assumptions published in the mainstream media this year. I'm surprised Target was kind enough to leave a simple comment they took out of context (crime reports are not an accurate representation of what is experienced in the store). I probably would have Legal threatening to sue for libel.

[veteran+]

And here we go with another giant crock of crap from the clueless news media.

https://www.cnbc.com/2023/12/19/target- ... earby.html

CNBC is shocked that some locations Target kept open are likely busier than ones they closed due to theft? Yes! That's the freaking point of business! When a store no longer makes money due to theft they close it! If a store has more cash flow from operations it gets kept open! So yes, a slower store getting hit a few times daily is more likely to become unprofitable than a big store getting hit more daily. Economy of scale. Cost leverage. This is a BUSINESS WEBSITE so I find it absolutely incredible that they don't understand these simple concepts taught in the first year business classes and not just to those with an MBA.

Once again they use the false assumption that every single time an item is stolen that there is a police report filed. Obviously to anyone on this board we all know that few if any shoplifting or theft incidents get reported to the police. Most police incidents reported are in conjunction with threats of violence or other such situations, while regular theft losses known or unknown are never reported. The comparison of police incidents filed by store to actual theft loss amounts is completely irrelevant. And of course there is no mention of dollars per reported incident. A store could only have a few incidents a day but they may be the full scale professional looting hits where they lose thousands of dollars at a time, while a busier store might be dealing with a few people running out the door every hour or so with a twelve pack of beer. Obviously the $50M a year store with the hourly run out of a few items can afford the loss but the $5M small format that has several full cart runs a day valued in the thousands can't stay open.

I am really struggling to understand how such ignorant reporting gets published. Obviously the store has a profit and loss statement, and they ain't posting it on the vestibule with this week's sales ad. What is the point of this garbage reporting?

Journalism/News has devolved (writ large) into this crap. This trajectory downwards (with such alacrity) was stimulated by the internet and by mergers and the dilution of so many regulations and laws that presdided over it.

This is what we allowed and this is where we are. I do not believe there is a solution unless we are willing to employ temporary draconian measures (highly unlikely). Pandora's box is wide open!