"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
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!