"Kroger's ORC Program -
Delivering a ROI that drives growth"

By Gus Downing
Publisher & Editor

As most aren't aware of Kroger literally just started their Corporate Loss Prevention program in January of 2008 when they hired Karl Langhorst their first corporate Director of Loss Prevention. Coming out of one of the Safeway divisions Karl had a strong and proven background in driving successful shrinkage reduction programs and delivering "best in class" results. Obviously his experience with one of the industry's leaders in Kathleen Smith, Safeway's Vice President of Loss Prevention, played an invaluable part in his developing the vision and the plan Kroger needed to create an LP model that focused on establishing standards, improving deliverables, maximizing technology, and delivering improved shrinkage results. All of which needing to be accomplished in record time and in a measured environment that had never invested before in a corporate Loss Prevention effort. As you can imagine the challenge was significant and the effort monumental.

From an Organized Retail Crime prospective Karl found that this 2,500+ store, 18 Division, $74B organization, at the time he joined Kroger, The Kroger Co. didn’t have any dedicated ORC investigators. Given his experience and knowledge Kroger hired their first Corporate Manager, Organized Retail Crime, in August 2009, Dennis Dansak. With 28 years as a Special Agent and Supervising Special Agent managing multi state and multi jurisdictional task forces. Denny brought a focused and highly specialized background that added value and creditability immediately. His subject matter expertise on property crime and managing investigative processes, and his knowledge of how to successfully manage and navigate the various law enforcement agencies has led Kroger into developing one of the most successful ORC programs in the nation. And all within a 3 year time period and in an extremely conservative successful environment that demands return on investment formulas on every investment. With that said and given the fact that Kroger now has 16 fulltime ORC investigators in the field and recently hired the former ASAC of the FBI’s Sacramento Field Office as the ORC Financial Crimes Investigator to track organized groups operating across the United States, it’s obvious that they've built a best in class model that's heavily supported by the senior management team at Kroger. A feat that's even more remarkable given the economic times we've experienced the last four years and the extremely competitive supermarket industry.

To take a non-existent program in 2009 and staff it with 17 new retail Loss Prevention positions is an accomplishment very few if any retailers can claim. These two leaders have been able to convince, show, and prove to their senior management team, a team that has a proven track record of delivering strong results to their shareholders, that investing in a formal and well developed ORC program is a wise investment that helps them improve their operating results. And the fact is their ORC program is still evolving and still growing. As they are continuing, every month, to staff more ORC positions around the country.

Their success, as Denny intuitively points out, starts with the senior management support and is delivered by the team members they hire. Focused on hiring executives that have very specific skill sets that enable them to successfully indentify, manage and resolve boosters and fencing operations the team is comprised of predominantly law enforcement investigators that also brings instant creditability and the subsequent increased results with the various law enforcement agencies they work with throughout the country.

As a supermarket chain their ORC focus has been on increasing the entire organizations ability, at the store level, to identify the boosters quickly and find, shut down, and prosecute the fencing operations with the emphasis being on the fencing operations themselves. Given the nature of their business and the fact that there's over 46,000 convenience stores in the U.S. alone they have a huge potential sellers population that can absolutely sell their products to the general public without anyone being wiser. And with only having to pay 10% to 15% of the retail value to the booster that's a great margin for that c-store operator.

Substantiating their success along the way with product specific and itemized improved shrinkage results Kroger has been able to continue to fund the growth of the ORC effort. Couple this with the senior management support, the actual leadership of the effort, and the team members themselves and what you have is one of the leading and fastest growth ORC programs in North America. And it all started a short three years ago.

Great Job Kroger ORC Team!