Virginia ABC makes changes to prevent retail, internal theft at stores, distribution center

There’s a growing trend throughout America’s retail industry related to retail shrink – the loss of inventory through process control failures, theft and damages, and the Virginia Alcoholic Beverage Control Authority is taking measures to address the shrink.

Virginia ABC reports its shrink numbers at 0.2 percent in 2021 or $2.828 million – much less than that overall retail marketing which reports a 1.4 percent average retail shrink, according to a National Retail Federation’s 2022 survey.

Virginia ABC reported a 0.112 percent shrink in 2022; resulting in losses of $1.528 million.

Through April 30, Virginia ABC has a 0.094 percent shrink with $1.127 million in losses.

While it is good news that the Virginia ABC has much lower average than the national numbers, ABC is still working to address retail and internal theft in its distribution center and network of 399 stores. Virginia ABC is also enhancing how it tracks retail shrink and manages inventory. These include more-frequent inventories, additional audit visits to stores and better categorization of shrink sources.

Virginia ABC conducted inventories of its distribution center and stores this year, and both results compare favorably to industry expectations for shrink.

The inventory showed 237 stores with an overage and 158 stores with a shortage. Total net retail shrink was -0.114 percent of sales. The distribution center inventory, which involved counting more than one million cases and 42,000 individual bottles, identified an overage of 160 cases and shortage of 96 bottles. At its conclusion, 99.987 percent of the distribution center’s inventory was physically accounted for.

“Virginia ABC must maintain a safe and enjoyable experience for our customers and teammates, while finding ways to deter and detect theft,” said Virginia ABC CEO Travis Hill.

Changes include law enforcement initiatives, additional audits, enhanced staff training and other tactics to best serve customers and reduce the impact of crime.

Virginia ABC is also reviewing and implementing changes at its retail stores to better deter and detect theft. These changes include emphasizing staff interaction with customers, minimizing the quantity of high – theft products that are placed on shelves at any one time, moving products for maximum visibility by staff members, lowering inventory levels at stores and adding additional in-store staff.

To prevent internal theft, Virginia ABC is enhancing the number of audit visits to stores, which declined during the COVID-19 pandemic and reviewing internal inventory processes.

Virginia ABC also identified a point-of-sale system vulnerability, which led to a review of more than 1,100 transactions at 134 stores. Seven stores experienced theft. Three employees at one store were charged and ordered to pay restitution, while six stores remain under investigation.

As part of its proactive approach, Virginia ABC has budgeted for a dedicated loss prevention function with two staff members.  These new teammates will focus on establishing a loss prevention strategy, developing processes and initiating continuous monitoring activities to safeguard assets and improve loss prevention.

Virginia ABC’s Bureau of Law Enforcement agents support local law enforcement through meetings, data sharing and operations. Seventeen joint operations were conducted between January and April: eight operations in Chesapeake, four in Virginia Beach, three  in Richmond and one  in both Portsmouth and Newport News. Four operations led to arrests.

Additional information about Virginia ABC’s plan to address retail shrink is available online.