Retail audit

What Is A Retail Audit

• A Retail Audit is a permanent sample of shops chosen to
represent the pre-defined total retail trade.

 Data collected from this panel on regular basis gives us

information about a product's sales and distribution.

Classified - Internal use

• Study of selected sample of retail outlets
• A retail audit is carried out on a certain
number of retail outlets to measure the
effectiveness, sales trends, sales volume etc.
of a brand or product in the retail outlet.
• technology is one of the key tools being used by
companies to carry out a retail audit.
• The technology can be used to obtain product
information (its features, sales, brand value
etc.), evaluate the competition, getting real time
data and improving performance trends.
 importance
• Gain Product Information
• Easily collect information about the newest products
on the market.
• Eliminate data re entry and overall response time by
getting real time results with no errors and no
paperwork.
 Retail store audit
• Every two months a team of auditors from a
research firm visits a sample of stores to count
the inventory on hand and record deliveries to
the store since the last visit
 Nielsen Retail Index
• Biggest research company in the world
• Their auditing services cover four groups
– Grocery products
– Drugs
– Mass merchandisers
– Alcoholic beverages
 advantages

• Identifies action steps for store management to

drive revenue and reduce costs
• Fosters a culture of accountability and integrity
• Identifies leading practices and potential
enhancements to store policies / procedures and
controls
• Step 1: Schedule the audit
• Using the audit tool built-in calendar or your
enterprise calendar, schedule the audit. Some audits
are announced to the store’s management.
• Step 2: Prepare for the audit
• Look up the current ownership and management.
• Look, compare and analyze past audits, put the
information in perspective.
• step 3: Conduct the audit
• Most audits are conducted from the outside in.
• the exterior (the parking lot if applicable, the window
in a mall location) and work your way in, around the
aisles and into the back of the store.
• Step 4: Use the device that works best, switch if
necessary.
• Some users like to conduct the entire audit on their
smartphone.
• Others prefer the tablet.
• Still others like to make a first pass on a smartphone
or tablet then power up their laptop and augment the
audit with additional notes.
 Ethical and legal issues
• Legal restrictions are imposed on practices concerning
pricing, product, promotion, distribution, trademarks
and HR policies.
 Laws that a retailer needs to
consider
• People perspective:
• 1. employees state insurance Act 1948: social
insurance scheme, sickness, maternity,
permanent disablement etc.
• 2. Payment of Bonus Act: out of the profits.
• 3. provident Fund: providing for after
retirement.
• 4. minimum wages Act: live their living.
• 5. trade Union: to put forward their ideas and
grievances.
• 6. maternity benefit:
• 7. equal remuneration
• Operations perspective:
• 1. shops and establishment licence: local
municipal bodies/ corporations.
• 2. prevention of food adulteration licence: for
sale of staples, milk and milk products, baked
items, frozen foods, beverages, eggs.
• Issued by health officer.
• Labelling : name tarde name, discription of
food
• Natural flavors
• Gelatine – animal origin
• Full/ part of animal - a symbol
• Vegetarian
• When permitted natural colors and flavors
added – declaration.
• 3. industrial dispute act: peaceful resolution of
disputes, harmoniuos relation.
• 4. consumer protection act 1986:
• Better protection of interest of the consumers.
• Speedy and unexpensive remedy to
consumers.
• Loss, damage, defect, excess price, hazardious
to life, any deficincy in service.
• 5. essential commodities act, 1955:
• Regulates the production and sale of fruits
and vegetable products.
• A. fruit product:Jams, jellies, pickles, procesed
vegetables, vinegar(fruit product order,1955)
• B. meat (meat food product order, 1973)
• C. solvent extrated oil/ edible flour( 1967)
• Vegetable oil products 1998.
• 6. standard of weight and measurement
act,1976:
• Name and address of packer/ manufacturer
• Name of the commodity
• Quantity (net)
• Month/ year of packing/ manufacturing
• Sale price of item
• Contact for consumer complaint
• 1.Ethical practice towards consumers:
• The retailers should charge fair price for the products
offered to them.
• The consumers have the right to get correct and
precise knowledge about the products sold to them in
respect of warranty, guaranty, price, usage,
ingredients etc.
• 2.Ethical practice towards investors/shareholders:
• The shareholders are the owners of the business.
Shareholders must be given fair returns on their
investment at regular intervals.
• The share holders should be disclosed with correct
information about the financial status of the business
organisation.
• The business organisation must act in the interest of
the shareholders
• 3.Ethical practices towards employees:
• The retail industry employs large volume of retail
staff.
• Therefore proper policies and procedures must be
framed for the employees regarding recruitment,
selection, training, promotion, welfare etc.
• Negative issues relating employment relations in the
work place can lead to loss of reputation and
customers, it leads to poor staff morale, low
productivity, and high labour turnover.
• Ethical and legal issues:
• 1. Consumer Fraud: The defrauding of a consumer of
various products and services which do not perform as
advertised, or overcharging or levying hidden charges
through deceptive
• business practices. Agencies for Protection of
Consumer Fraud - Indian Association Of Consumers
(IAC)
• Consumer Forum (CF)
• Consumer Education Society (CES),
• Karnataka Consumer Services Society (KCSS)
• 2.Legally prohibited action by an employer or
TRADE union.
• Where both parties should not refuse to bargain in
good faith.
• 3. Retail Theft:
• It is also called as Shop Lifting Shoplifting (also
known as boosting, five finger discount, or shrinkage
within the retail industry) is theft of goods from a
retail establishment.
• There are people and groups who make their living
from shoplifting, who tend to be more skilled.
• 4. Slotting Allowances: A fee paid by a manufacturer
to a retailer to provide shelf space or a slot for a new
product.
• Is a fee charged to produce companies or
manufacturers by supermarket distributors (retailers)
in order to have their product placed on their shelves.
• The fee varies greatly depending on the product,
manufacturer, and market conditions
• 5. Use of Customer Information: The consumer
information contained here is intended, in part, to
alert the reader to pertinent issues regarding this site.
The information contained herein is not intended as a
substitute for professional consultation.
 GREEN RETAILING

• Retailers are keen to show that they are green,

recycling-friendly, fair-trading, waste-conscious,
Socially-responsible and energy-conserving.
 consumerism
• Definition- the "social movement seeking to augment
the rights and power of buyers in relation to sellers,"
(Kotler, 1972)
• Consumerism is a social and economic order that is
based on the systematic creation and fostering of a
desire to purchase goods or services in ever greater
amounts.
• Ethical consumerism (alternatively
called ethical consumption, ethical
purchasing, moral purchasing, ethical
sourcing, ethical shopping or green
consumerism)
• fair trade: bought from suppliers who respect
basic rules of human welfare in the workplace;
• environmental sustainability: for example
minimal packaging;
• community development: supporting local
enterprise and local produce, especially from
community businesses;
• personal health: natural wholefoods, free from
artificial additives, preservatives, colourings
and flavourings;
• animal welfare: reduced animal exploitation,
with products that meet rigorous standards.
• Consumerism in India:
• India is a developing economy.
• Not all Indian consumers are well educated.
• Consumers are often exploited, misled by deceptive
advertisements, packaging poor after sales service,
adulteration, and so on.
• Liberalization and competition
• Survival of the fittest
 Social responsibility
• is an ethical framework which suggests that an
entity, be it an organization or individual, has an
obligation to act for the benefit of society at large.
• Social responsibility is a duty every individual has to
perform so as to maintain a balance between the
economy and the ecosystems.