Shrinkage Happens. Don't let it impact hotel retail profit!

To be clear, this article has nothing to do with George Costanza's late night dip in the pool - and everything to do with a variety of ways fearful managers unknowingly cost their hotel pantry revenue and guest experience to avoid the inevitable cost of doing business.

In hospitality it is well known that there are unavoidable maintenance and repair costs for removing chewing gum in the carpet and replacing broken lamps and stolen towels. Similarly, in retail, it is well known that there are unavoidable shrinkage costs to operate a lobby store that occur from guest theft, employee abuse, and product expiration.

Too many managers desperately try to eliminate shrinkage by:

  • Locking down products

  • Placing small orders when supplying the store

  • Eliminating important product categories

Mistake #1. If I lock all the back stock cabinets, my guests can't steal stuff!

Result: The front desk can't replenish the shelves on their shift because they

can't find the keys or they just don't have time to go grab them. They have a few minutes to restock shelves and this just made it harder.

Potential Cost: The average hotel pantry transaction is $5.25. Every time a

product is unavailable, stores forfeit all or part of that revenue. By preventing a hotel sale just twice a day caused by lack of product on the shelf, hotels potentially lose more than $300/mo in retail sales.