A second chance

Last week I was spending some time with a young lady in her first year at University. She was taking very similar subjects as I had done so many years ago. She asked me the question – how did you know what you were going to do after you completed your various degrees?

A really good question! How did I land up in retail of all industries in South Africa? Unlike other countries being in retail in South Africa is bottom of the rung – even the banking sector was deemed a better industry to work in. It still is regarded by most as a dirty industry to work in.

And this is how it happened. During my first year at University I was really struggling. My parents were unable to assist me financially in anyway to study. Early on in my first year I was introduced to a business owner who listened to me saying how hard it was just to stay at university – and how uncertain I was that I would be able to complete one degree – never mind three.

He owned a hotel in Cape St Francis – a good 9 hour drive from where I lived. He was having trouble managing the hotel and its bottle store that was attached to the hotel. Would I like to work each vacation for him – and all the long weekends and public holidays throughout the year? I jumped at it especially when he told me how much he would pay me! It was a huge salary.

And so that is where and when I started in retail – at 18 years of age. My first day on the job was horrific! We had two entrances to the bottle store – one for the “walk in” customers and one for the drive in customers. All returnable bottles were to be handed in on the “walk in” side – and the customer was duly paid for these bottles on that side too.

I could not believe just how many bottles were returned on one day! I spent the day running between the two tills. When I closed up for the night – and did my paper work for the end of day I was horrified at what I found. Guess what I had done? I was receiving and paying out for the same bottles over and over again! I had not secured the empties as they had come in!

And the cost – was almost equal to my month’s salary! I was devastated! My first real days work ever – and I had just cost my boss oodles of money in ONE day…

Anyway I decided to own up there and then. And resign with no pay for the day if need be – or work for the month for no salary. So those were the thoughts in my head when I went to see my boss.

He listened carefully to my story and asked a few clarifying questions. And then he sat very quietly. I was nearly in tears by then. The questions he was asking me sounded like he thought I had deliberately stolen the money – and now I was thinking he is going to call the police. I was a wreck.

He then asked me the following questions:

• “What will you do tomorrow to make sure it does not happen again?”
• “What have your learned today?”

On my way over to his office I had already thought about these very same things – so I was able to answer them quite easily and he was more than satisfied with my proposed solutions.

And so I got my second chance. I grabbed it with both hands. I spent time looking at the range of products, the pricing structures (I was determined to get those lost monies back for him) – I rearranged the layout of the store – not just once but over and over and until I thought I had got it right.

And I found that each change I made – even in the store room – made us more profitable. I LOVED it. He gave me complete carte blanche – I could add or delete products as I liked. I could price as I liked and even source suppliers that I preferred. I set up three pricing structures for each product we sold – one for the walk in entrance, one for the drive in customer – and a third one for the guests in the hotel and its restaurant.

I was hooked! And I never looked back – you either love the retail world or you hate it. It never felt like work to me – I was enjoying each day at work. Everything I learned in those days was by trial and error. It was only years later that I started to “study” retailing principles. But they were mostly old hat to me by then….

So the next time a staff member makes a genuine error which costs you money – think twice about how to deal with that person. As it turned out for me – I worked for Hilton for many years which allowed me the opportunity to complete three degrees. He had bought my loyalty for life! And when I was finished – he asked me to run of his other company’s which I turned down.

I was lucky to be able to do more or less as I liked in that bottle store. I was able to try out new things. It was an opportunity of a life time for me.

But how many of us even listen to suggestions our staff make or even allow them to try something new in our stores?   And after a while they stop making any….

Perhaps give them and yourself a second chance…

 

Take care out there

Staff attitudes can kill a business

A number of my friends have been raving about a new Spar that opened up in the Plattekloof area recently. So I decided to do one of my “big” shops there and test it out for myself. They were right about one thing – it is big!

Anyway, my kids go through cheese like nobody’s business – so I normally buy one of those very big blocks of cheese and take it to the deli section in the supermarket and ask them to grate it for me. So off I went to the deli section in this new Spar and asked them to grate it for me. The person behind the counter told me they don’t do that for their customers.

I said I am sure you are wrong – won’t you please call your supervisor. She arrived and said more or less the same thing to me. I explained that all their competitors do it so perhaps they should check once more to see if they were allowed to do it. The supervisor duly came back and said no they do not provide that type of service.

The shop was not busy at all – and nobody had ventured near the deli counter in all this time. At least 10 minutes with all the walking backwards and forwards to find out if indeed they could do this. Now I bet you a million dollars that there is no rule in that store that says you may not grate cheese for our customers. But they stuck to their guns and refused to grate the cheese.

This is what I call a serious attitude that will be the demise of any store that has just opened. You cannot tell me it is a training problem because it is not. These guys were not even pleasant in their negative responses – they were not prepared to go the extra mile even though there is a great Pick and Pay just one block away which is always full. All of which I tried to explain to them as politely as I could.

On what basis were they selected for their jobs? Were they tested for their attitude on the job?

I had another similar incident at a Spar Tops store recently. I have just moved and have had some temporary staff help me move in. When I drew cash to pay their wages – I got a fist full of R200 notes. So I popped into the Tops which is where the ATM is – to ask for change. I waited until they were serving a customer as I know they are not allowed to open their drawers without a transaction.

What did the cashier do as I asked? She literally slammed the till drawer closed and said “Can’t you see my drawer is closed?” There was another customer right behind this one – so I said I can wait until you open it again. She then said without even asking me what type of change I wanted and said “I have no change”. “But I want notes, not coins” and she once again said “no”.

Now I have moved to a small town called Hermanus – and not one customer standing at the till point at that time was remotely happy with her response and told her as such. I wonder how many of them will return? I know I won’t.

So how do you handle staff, who persist in dishing out negative attitude? That is of course if you know about it?

You can’t train attitude – it comes from within that person. It is the willingness to go that extra mile for each and every one of your customers – each and every time.

They must “want” to do it. If the willingness is not there – it is time to discipline them out of the business.  Yes I know that some of you will say – you can incentivize the staff and you will get better results. But that is missing the point in my view.

It is the chicken or the egg scenario – which comes first? Their attitude or your willingness to pay extra for providing what should be just good common sense  -  customer service?

The sad part for me is that if the manager or owner had been around – there would have more than likely been a very different response to both requests. I did pay the Spar in Plattekloof one last visit recently and was saddened to see how the range had been reduced with huge big empty spaces on the floor. It may have nothing to do with the staff – but my guess is that it has!

Spend more time up front recruiting your staff and test for attitude as thoroughly as you can. None of us can afford to have staff that will not go the extra mile!

Take care out there

Jocelyn Daly

Do you have the controls to reduce shrinkage in your store? (Part 2)

Goodness me it seems that this has been a very long and arduous year! Anyway this is our last blog for 2010 and completes the previous one! Feedback welcome.

So, how do you improve stock control in your store?
The amount of shrinkage in your store will be in direct proportion to the controls you have in place. The more controls, checks and balances you have over your stock – the lower your shrinkage will be.
There are many areas of our business in which we can “lose” stock. These include:

1. Ordering
2. Receiving
3. Return of goods
4. Pricing
5. Price changes
6. Displays
7. Food preparation
8. In-store use
9. Point of sale

In our last blog we covered points 1-5, now we review points 6-9 and state some of the concerns for these points – and then offer one or two suggestions on how to deal with it.

Displays:
As with all the points listed above once again in this area there are so many ways we lose stock in our displays. I will only raise one or two for now.
Firstly there is the old adage of FIFO – first in first out. We have to bring “older” stock to the front of the display before we merchandise the new stock. Ever watched a house wife shopping for milk in the local supermarket? Guess which milk she puts in her trolley – the milk right at the back of the fridge. She knows that the freshest milk is to be found at the back of the fridge.
How do we lose money if we do not implement this rule? Out of sell by date – if it is out of date we have to write it off which is a loss. On some perishable items we are able to claim back from our supplier. But with sweets and chocolates for example – you have to write it off. It is a direct loss to the business. And don’t tell me your staff rotate stock – do a check yourself.
Take any of the count lines.
Start at the front – are the sell by dates earlier than the ones at the bottom or back of the pile?
It is time consuming for your shelf packer to pick up the existing stock and then merchandise the new stock underneath on the shelves. If there are no checks – your staff will take short cuts.

Another area for concern on the displays is our price labels. I have no idea why a Kwik Spar with many more line items than us – can get this right on their shelves – and we can’t? I am doing some store visits tomorrow in the Sandton area with new dealers – and this is one of the checks that they will be asked to do.

• How many products had no price labels?
• How many had incorrect price labels?
• Do this check yourself in your own store today!

This costs your business each and every day.
Firstly where there are no price labels, customers will be less likely to buy the product. They do not want to buy something that has no price attached to it. So it’s a lost sale.
If the price is incorrect when the customer gets to the till point – they pay the price that has been displayed. You lose again – your margin has just been eroded.
It gets even more scary if the product and price have not been entered on the system! The cashier will make a decision on what to charge based on other like products – which may be way out of line!
Our displays are our business in many more ways that one! – We need to get each detail of this piece right in order to ensure we do not lose any monies or sales from this vital point.

Food Preparation:
Not all of us prepare food on our premises but those of us that do will know just how hard it is to keep track of our food items. At best most of us prepare pies. So I will stick to this simple example for the most part.
The challenge here is firstly to accept that there is going to be some wastage when preparing food. How much are you prepared to lose daily? And then keep track of this as wastage! You are still losing money – but you have it under control.
Measure what is going in (how many pies are baked) and then cross check with what goes out…..How many are sold! At best – there should be no shortages at all!
Take stock per shift and cross correlate these with sales per shift. Work out what is OK to be lost to wastage and work within that rule for you. I buy in and prepare 20 pies per shift – then you need to ensure that you sell 20 pies per shift!
It gets harder when we prepare from raw product. How many slices do you get out of an average tomato? At the end of the day how many products did you sell with tomato’s – and how many are left whole in the store at the end of the day? The rest is wastage at best – but if the staff are nibbling – it is shrinkage. Both are a loss to the business.
From bitter experience – bacon is a big one for losses! Check it out on a per shift basis.

In-store use

Most of you will take one look at this heading and say – yes I know we use products off the shelves for our own in-store use. But it is small and does not warrant too much energy on our part checking it.
The fact remains – you bought 10 bundles of 2 ply toilet paper each containing 48 rolls. You receive this as stock onto your system.
You need to take it into stock on two fronts.

1. In-store usage
2. For resale to the customer
3. Allocate this based on actual sales and usage – which you can only get if you account for it appropriately.

Now you run out of toilet paper in the public toilets. If you take one from the shelf – do you ring it through on the point of sale as a sale item? If not – it leads to shrinkage.
There is a great concern if you are taking stock items off the shelf for store use and NOT ringing these up as a sales item. Your staff see that – and know that if they take one or two rolls home – nobody would be any the wiser.
Another example: If you sell fresh fruit for example in your store. You need to replenish your fruit salad offering – so your staff take another 2 banana’s, 2-3 apples etc – all for use to replenish that fruit salad for resale to your customers. It is not rung up as a sale – nor is it transferred to the food offering for resale!
You are under on the resale – and over on the fresh food offering. But having no controls in place allows your staff to move stock at will – and then the accounting thereof gets out of control – and it all leads to further losses! On the system anyway…

Point of Sale (Till Point)

Books have been written on just this area of our business and – yet it remains a porous area of our trading environment.
Not all of our losses in this area can be attributed to theft and fraud (a subject that we have a few articles on up on our website, such as “Point of Sale Fraud”, “Inventory Record Frauds” etc;  see www.cstores.co.za )

Most are just plain carelessness.
Scenario one: a customer comes to the till point puts his goods on the counter and takes a sip of Coke while doing so. The cashier rings up the goods on the counter and omits to ask to scan in the Coke. The result: One Coke lost.
Scenario two: a customer comes to the counter, places their goods on the counter and these get rung up. The cashier does not see that their child is busy eating a chocolate – their head height is too low for the cashier to see this.
Another scenario: Our cashiers are often responsible in the mornings for the returns of newspapers and milk. It is often their busiest part of the morning rush hour – so the rep does the count of what is being returned – and she just signs it on your behalf. Customer comes first – and they must not be kept waiting after all. There was no check done at all – and in particular newspapers and returns remain a key concern as invariably sales to purchases never match!

Simple scenarios but all too common. In each case – the amount lost is not big monies. But if you add them up across all these areas in their totality over a month – you have a shrinkage problem.
My suggestion is to keep your eyes peeled and demonstrate to your cashiers what to be on the look out for each and every day. Easier said than done, I know!

Almost 2011! To those of you that are travelling over this festive season – my wish for you and your family is that are you arrive home safely having had a wonderful break. To those of you trading in perhaps your busiest period of the year – I hope the tills keep ringing merrily along out there! Happy trading..

Speak to you in 2011
Jocelyn Daly
www.cstores.co.za

The changing landscape of Convenience stores in South Africa

I am thoroughly enjoying the changing landscape of our convenience stores! It is like a breath of fresh air! New store designs, new product ranges – all hopefully showing improved profitability for all our stakeholders.

The effects of the JV’s, new supplier agreements and internal franchisor structures are all showing at store level. Exciting stuff!
BUT and here is the nub of it going forward. In the past two blogs I have looked at the coffee offerings out there in the market place – the same bean, the same expensive machinery, – with differing and conflicting offers to the customer. It is the PEOPLE that make it succeed or fail…..

Our staff, are the people that our customers interact with, and we have a dearth of good skills to choose from. More importantly as our sales have increased so too our dependence on not only good staff – but good managers! Many of you have been on one of my many training courses over the past 15 years or so – and training and skills development is one of my passions.

On my recent training courses over the past year or so, I am coming across fewer and fewer good management material. If we have poor managers – we have no hope of getting our staffing right!
I am not sure why this is so. I know many will tell me it is the BEE legislation that is restricting us in selecting good management material. But I know this is incorrect and too trite an answer. My last training programme had few if any previously disadvantaged representation which in itself was highly unusual – and they were generally shocking in performance and understanding of tasks. It is always easy to blame external factors – harder to look at ourselves and how we are to blame.
There are two extensions of this challenge. The one is the selection of staff at the coal face. The other is the impact on the shopping experience. Yes the stores look great in many cases but the shopping experience itself is boring as all hell. No music. Where are the welcoming faces? You ask for a particular product – just get a shrug of the shoulder if you are lucky! Even managers which you see hustling from one task to the other don’t seem to care. They have this blank look on their faces – please don’t interrupt me complete my current very important task! I had occasion this last week to see a very disorientated customer ask a cashier if they stocked a particular product – she shook her head and said she would ask her supervisor.
The supervisor turned out to be in the paypoint kiosk at the time – she did not even raise her head or look at the customer asking the question. She just indicated in her body language that they did not have the product in question. BUT they did – and I showed the gentleman where it was on the shelves and promptly lost my place in a very extensive queue!

And there are good people out there – I know. The fish rots at the head – and I spend most of time challenging you on staff selection at grass roots level. But it starts with us – you and I. And the level of selection just below us! Get that right and we might, just might, improve the level of service experienced by our customers at grass roots level! It starts and ends with us……
Take care out there!

Jocelyn Daly

A word from Max, social and website editor: We have many good downloads on http://www.cstores.co.za/ to assist with the managment of your c-stores! They will not be free forever! I have seen some of the information that Ms Jocelyn Daly gives out for free being sold for R2 000.00!