MARS ADDS EAS AFTER PILOT CUTS SHRINK 65%

DENISE ZIMMERMAN

BALTIMORE -- Mars Super Markets here tested the power of perception in loss prevention tactics during a two-store pilot that led to a rollout of electronic article surveillance technology this week.

The chain's 15 stores are to have installed EAS systems that resulted in 65% shrink reduction at two test sites, one which was located in a high pilferage area and one in a low pilferage area, said Dennis McCoy, chief executive officer.

"I insisted my people do some reasonably scientific testing before we spent the money because it's not cheap to do this," he told SN. The systems, including software, security tags and freestanding pedestals that read tags at entrances and exits, will cost about $500,000 for the entire chain.

McCoy said the test group of security-tagged products and a control group of products that were not tagged experienced identical shrink rate reductions.

"We were trying to measure whether reducing shrinkage in one product would result in an increase of shrinkage in a similar product," he said. For example, the test group of tagged items might include a 100-count of a particular national brand of aspirin and the control group of untagged items might include the same size bottle of aspirin from another national brand.

The results of the 60-day test speak to the power of perception, he said, because shoppers believed all merchandise was tagged with security labels.

"We got a two-thirds reduction in shrink in the group that didn't even have the labels," he added.

The system, which was provided by Sensormatic Electronics Corp., Boca Raton, Fla., is projected to deliver a return on investment in 3.7 months based on reduced theft, McCoy said.

Prior to launching the test, Mars took detailed inventories on all products involved and then examined inventory levels afterward.

"It was very easy to measure. We had our store management people save any open containers that were found in the store so we could see if we were getting pilferage indirectly from people taking stuff out of the box," McCoy noted.

In addition, front-end staff were required to chart the number of alarms triggered by tagged items that were not deactivated. Early on in the test, alarms were frequent but dropped off dramatically, he said.

In addition to the new electronic article surveillance technology, Mars Super Markets uses observation decks and closed circuit television to monitor store activity and combat shoplifting and employee theft.