THE FOOD MARKETING INSTITUTE 2009 SUPERMARKET LOSS PREVENTION SURVEY

Dear Food Retailer/Wholesaler: FMIs Supermarket Loss Prevention report has been the premier source for benchmarks and trends in the food retailing industry for the past 18 years. We need your help to ensure accurate representation of food retailers of all sizes, regions and formats for this important report. This year we worked with a committee of your peers to be sure that the questions and topics are valuable to you. In a continuing effort to pursue useful information we have revised topics and questions to produce retailer driven research, which will be more useful in the coming years. The attached survey covers ten different topics and in return for your efforts, we will provide you with a FREE copy of the report upon its publication. The report will provide you with all the tools to evaluate the results and costs of your security and loss prevention programs against industry averages. When completing the questionnaire, please use 2008 figures. Please return the survey to FMI no later than Wednesday, June 3, 2009. Be sure to include your contact information so we can send you your free copy. All individual data will be held in strictest confidence. Thank you again for your participation in this vital industry research. Grace Schulz Senior Analyst Food Marketing Institute

Thank you for your participation!

To receive your FREE copy be sure to return your completed survey form to:

Fax 202-220-0868 by Wednesday, June 3, 2009

email gschulz@fmi.org with any questions

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THE FOOD MARKETING INSTITUTE 2009 SUPERMARKET LOSS PREVENTION SURVEY

A.

DEMOGRAPHIC INFORMATION
5. Over the past 12 months did your total annual shrink: O Increase O Decrease O Stay the same 6. Please indicate shrink as a percentage of total sales for the following departments:
Shrink as a % of dept sales Gen Merchandise Meat & Seafood Produce Bakery Deli Dairy Frozen Foods Dry grocery Health & Beauty Floral Liquor Pharmacy Shrink as a % of retail sales Is shrink measure d at Cost or Retail?

1. Please provide total 2008 company data for each of the following: Number of stores ______________________ Annual company retail sales $_____________________ Avg. # of transactions per store/per wk ______________________ Avg. # of checkouts per store ______________________ 2. What was your companys total shrink figure as a percent of retail sales for 2008? _______% 3. On a scale of 1 10, with 10 being most severe, how would you rate the impact on your company from the following: _______ Counterfeit money _______ Credit/debit card fraud _______ Gift card fraud _______ Employee theft _______Organized retail theft _______ Robberies _______ Self-checkout loss _______ Shoplifting _______ Shopping cart theft _______ Vendor theft _______ Worthless checks _______ Other___________________ 4. Which position or function does the head of your LP Department report to? ________________________________

7. Do you have a shrink management program? O Yes O Planning O No 8. Does your company have the ability to track inventory shrink by SKU? O Yes O No 9. What percentage of your companys total shrink is attributable to? _______% Shoplifting _______% Employee theft _______% Vendor theft _______% Other = 100%

B.

EQUIPMENT AND AUDITING

11. What audit method is used? O Paper/pencil forms O PDA or laptop based (in-house hosting) O Web based (third party hosting) O Other: ________________________

10. Do you do security compliance audits? O Daily O Weekly O Bi-weekly O Monthly O Quarterly O Annually O Other: ________________________

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12. Please indicate the types of audits conducted by the Loss Prevention Department. (Select all that apply) O Shrink audits O Security assessment audits O Safety audits O Operational/ procedural compliance audits O Pharmacy (HIPAA) audits O Food defense/food safety/ bioterrorism audits O Other: ________________________ 13. Do you use third party auditing services? O Yes O No 13a. If yes, in what areas: O Shrink audits O Security assessment audits O Safety audits O Operational/ procedural compliance audits O Pharmacy (HIPAA) audits O Food defense/food safety/ bioterrorism audits O Other: ________________________ 14. Does your company use point-of-sale exception monitoring to combat internal shrink? O Yes O No 15. How often do you audit/monitor pointof-sale reports? O Daily O Weekly O Bi-weekly O Monthly O Quarterly O Annually O Other: ________________________ 16. What percentage of your stores have the following electronic security systems? (If none, please write zero) Tape CCTV systems _______% Digital CCTV systems _______% EAS _______% Access Control Systems _______% Electronic DSD receiving _______% Shopping cart containment _______% Other _______________ _______%

17. Do you monitor and/or retrieve video remotely? O Yes O No 18. Where is CCTV used in each location? (select all that apply) Distribution Centers O Access points O Freezer vaults O Shipping dock O HBC storage O Parking lot O Break rooms O Receiving dock O Refrigeration rooms O Time clock O Computer rooms O Other: ________________________ Retail Stores O Access points O Pharmacy sales O Back room O Pharmacy prep area O Cash office O Computer room O Parking lot O Deli prep area O Receiving dock O Receiving bay (outside) O Sales floor O Checkstand/lanes O Time clock O Other: ________________________ Corporate Offices O Access points O Computer rooms O Break rooms O Hallways O Mail room O Reception/lobby O Parking lot O Executive area O Receiving O Egress points O Time clock O Other: ________________________ 19. Do you use biometric readers? O Yes O No 19a. What type? ________________ 19b. In what areas? (select all that apply) O Access control O Check cashing O Computer access O Payment systems O Time clock O Other: ________________________

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C. SHOPLIFTING
20. How many shoplifters did your company apprehend in 2008? _______ Please list in order the top five types of merchandise most often taken. (1 = most often taken, 2 = second most often taken, etc.) Please use each number only once.
___ Analgesics ___ Antacids/Heart burn medication ___ Baby formula ___ Batteries ___ Beer ___ Cigarettes ___ Contraceptives ___ Diet pills/supplements ___ DVDs/Videos ___ Film ___ Liquor ___ Meat ___ Oral care products ___ Razor blades ___ Seafood ___ Vitamins ___ Other health/beauty care items ___ Other nonfoods___________ ___ Other ___________________

22.

What was the total dollar value recovered from all shoplifters in 2008? $_______ Of shoplifters apprehended, how many were prosecuted criminally? _______ Do you use civil recovery statutes to recoup some of the costs of apprehending shoplifters? O Yes O No
(If no, skip to question #26.)

21.

23. 24.

24a. Is your program: O In-house O Outsourced O Both 25. What percentage of total shoplifting cases did you file with civil recovery in 2008? _______% 25a. What was the total dollar amount demanded from civil recovery? $_______ 25b. What was the total dollar amount recouped from civil recovery in 2008? $_________

D. EMPLOYEE THEFT
26. How many total incidents of employee theft were recorded in your retail stores in 2008? _______ 27. What was the total known value of the cash/merchandise recovered (include all incidents) in 2008? $_______ 28. What was the percentage breakdown of employee thefts by location? _____% Cash office _____% Customer service/courtesy booth _____% Fuel station _____% Pharmacy _____% POS/Checkstand (Manned) _____% Sales/service area _____% Satellite register _____% Self-checkout _____% Stock room _____% Other _______________ =100% Total 29. What was the percentage breakdown by type of employee theft? _______% Cash theft _______% Coupons _______% Discounting/Sliding _______% Fuel at fuel stations _______% Merchandise theft _______% Refunds _______% Gift card fraud _______% Vendor theft involvement _______% Voids _______% Other_____________ =100% Total 30. As a result of employee theft or misconduct in 2008, how many led to the following? Terminations ________________ Prosecutions ________________ Civil recovery ________________

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31. Does your company utilize an employee hotline program? O In-house contract O Third-party contract O No hotline 31a. Can tips be sent electronically to the hotline program? O Yes O No 31b. How many calls or initial contacts did your hotline program receive in 2008? Electronic contacts _____________ Phone contacts _____________ 31c. How many contacts turned out to be valid/legitimate in 2008? ___________ 31d. How many employee terminations did you have as a result of your hotline program in 2008? ______________

32. How many contacts dealt with the following issues in 2008? ______ Drugs/alcohol ______ Harassment/discrimination ______ Employee theft ______ Workplace violence ______ Food safety ______ Other __________________ 33. Do you have a threshold for determining when to prosecute an employee? O Yes O No 33a. What is it? ________________

33b. In 2008, what was the highest dollar amount case prosecuted? _________________ 34. What percentage of employee thefts did you prosecute in 2008? ________________

E.

ORGANIZED RETAIL CRIME

39. In the past year, have you been asked by Senior Executives in your company to present information on ORC? O Yes O No 40. 41. 42. Are you assisting in the formation of legislation regarding ORC? O Yes O No Are you marking products? O Yes O No

35. On a scale of one to five, with five being severe, how would you rank Organized Retail Crime (ORC) as a threat to your company? _______ 36. Have you experienced an increase in ORC in your stores over the past year? O Yes O No 37. Have you allocated resources to address ORC? O Corporate personnel O Additional security systems O Additional security personnel O Additional cameras O Additional loss prevention training O Product marking technology O Other _______________________ 38. Do you participate in a database program designed to track ORC? O National database O State/Regional database O Tracking within company O No, we do not track ORC

Are you using benefit denial tags or systems? O Yes O No

42a. Which products are locked in cases or benefit denial devices? (select all that apply) O No products are locked O Beer/Wine/Alcohol O Analgesics O Contraceptives O Batteries O Baby formula O Cigarettes O DVDs/Videos O Film O Liquor O Meat O Razor blades O Seafood O Oral care products O Vitamins O Diet pills/supplements O Antacids/Heart burn medication O Other health/beauty care items O Other nonfoods___________

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F.

LOSS PREVENTION PERSONNEL AND EXPENSES

46. In 2008, what percentage of your Loss Prevention operational budget (including payroll) was spent on the following areas? (If none please write zero) Retail: _______% Distribution: _______% Manufacturing: _______% Other: ______________ _______% =100% 47. Does your company provide formal loss prevention training for? (select all that apply) O Regional LP management O Operations middle management O Store managers O Pharmacy personnel O Store personnel below level of mgr. O Security officers O Store detectives 48. How long is your training program for inhouse security/loss prevention staff? a. Classroom:_________ hrs b. On-the-job:_________ hrs 49. Do you finance any education opportunities for LP personnel? O CEUs O Conferences/Seminars O College training courses O Allow time off but education is self-funded

In 2008, how much money was spent company wide on the following? (If none please write zero) 43. Loss Prevention Personnel Expenses: Security/loss prevention personnel wages and benefits $_______ Contract security officers $_______ Contract off-duty police $_______ Check collections $_______ Other ______________ $_______ 44. Capital Expenses: CCTV purchased $_______ CCTV leased $_______ EAS $_______ POS Exception Monitoring $_______ Access Control $ _______ Other ________________ $_______ 45. What areas within the Loss Prevention department do you outsource to vendors? (select all that apply) O Shoplifting apprehension O Awareness program/materials O Shrink/security audits O Distribution security officers (uniformed) O Retail security officers (uniformed) O Other _________________________

G.

WORTHLESS CHECKS/MONEY TRANSACTIONS

54. What percentage of bad checks were: _______________% a. Fraud b. NSF _______________% 55. What percentage of bad checks were: a. ID fraud _______________% b. Check fraud ______________% 56. What was your total credit/debit card use as a percent of total retail sales in 2008? _______%

50. Are you currently PCI compliant? O Yes O Planning O No 51. Do you have a money services business? O Yes O No 51a. If yes, how many IRS audits did you have in 2008? _________ 52. How many worthless/counterfeit checks did your company accept in 2008? ______ 53. What was the total dollar amount of worthless/counterfeit checks? (face value only) $_______

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57. What was your net credit/debit card chargeback in 2008? $_______ 58. What was your net credit/debit card fraud loss as a percent of total retail sales? _______% 59. Do you sell gift cards in your stores? O Companys own store gift cards O Pre-paid credit cards O Restaurant gift cards O Other retail gift cards O No gift cards

60. Have you experienced gift card tampering, fraud or theft? O Internal O External O No 61. What measures have been taken to combat gift card tampering, fraud or theft? (select all that apply) O Limited dollar amount on gift card O POS monitoring O Tender restriction (i.e. cash only) O Quantity limit O Other: _______________________

H.

EMERGENCY PREPAREDNESS
65. Do you test your emergency plans annually? O Yes O No 66. Do you offer disaster education to your customers? (i.e. hurricane guide, types of food and supplies to have on hand) O Yes O No 67. Was your emergency plan used during an actual crisis in the last year? O Yes O No 67a. How would you rate the success of your emergency plan? O Excellent, no major problems O Good, one or two major problems O Fair, plan requires some work O Poor, back to the drawing board O Unknown

62. Do you have a crisis team in place for large scale emergencies? O Yes O No 62a. Does the crisis team meet regularly to evaluate and update emergency plans? O Yes O No 63. Do you provide staff training in emergency preparedness for (select all that apply) O All employees O Management and above only O Full-time employees only O Corporate staff O Store level staff O Other: _______________________ 64. Do you have an off-site back-up facility in place for data and other essential information? O Yes O No

I.

ROBBERIES
71. Which areas were robbed? (select all that apply) O Checkstand cash (front end) O Courtesy booth O Fuel stations O In route to bank O In-store bank O Individual department registers O Store floor (merchandise) O Money in safe/vault O Pharmacy O Other _____________________

68. How many robberies did your company experience in 2008? _______ 69. What was the total dollar amount of cash/merchandise taken from all robberies in 2008? _______ 70. What percentage of time was there a weapon displayed during a robbery in 2008? _______

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J.

ECONOMIC IMPACT

72. Have you noticed a change in theft-related loss over the past 12 months? O A big increase in theft-related loss O Somewhat of an increase in theft-related loss O No change in theft-related loss O Somewhat of a decrease in theft-related loss O A big decrease in theft-related loss 73. How much do you feel the change is attributable to the recession? The recession is O A huge factor O Somewhat of a factor O Not too much of a factor O Not a factor at all 74. In your opinion, are the taken items more frequently O Items to be fenced/resold O Products primarily for own consumption/use 75. Where have you seen the increase in theft-related loss specifically? (select all that apply) O Shoplifting O Employee theft O Vendor theft O Other _______________________________________________________________

Thank you for your time!

(To receive a free copy of Supermarket Security & Loss Prevention 2009 please complete the following)

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Fax to 202-220-0868 by Wednesday, June 3, 2009

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