Lottery scratch offs
Foot traffic may be down, but lottery shrink continues to rise

Convenience retailers are always looking at new opportunities to sell products and improve customer experience. As many consumers return to typical shopping patterns, c-store foot traffic is still less overall compared to the previous year. Although shopping trips are not fully back to normal, basket size continues to increase and lottery ticket sales are still a significant driver of in-store sales.

Recalibrating and focusing on high-performing categories like lottery, tobacco and beer is key to improving store performance. According to the 2020 NACS SOI Report, “Shifting shopper behaviors due to the pandemic drove new levels of demand for convenience in the categories of lottery, tobacco and beer—all of which were flat to declining before the pandemic.”

Foot Traffic Slow to Rebound, but Shrink is on the Rise

Whether it’s lottery, tobacco, or beer, merchandise shrink heavily impacts your bottom line. On average, convenience retailers lose just over $5,000 in lottery tickets to shrink each year. And that’s just lottery! With a margin of six percent per ticket, profit recovery for lottery takes its toll on c-stores and eats directly into your yearly revenue.

Even though foot traffic has declined since the pandemic, unfortunately, shrinkage continues to be a problem compared to two years ago. Convenience retailers operating 11 to 200 sites see an average of $751 in retail shrink per month.

So, what can you do to avoid shrink in top categories like lottery?

Data is the Best Defense to Combat ‘Shrink’

Because lottery is such a high-risk item for convenience stores, you need the right tools to keep your profit where it belongs – in your pocket!

The key to combating lottery and general merchandise shrink in your c-store lies within your data. The first step is making sure your c-store captures the data you need for inventory transparency. To improve visibility, try item-level inventory. This enables accurate, easy reconciliation with less manual labor.

You also need to protect your merchandise from those who will take advantage of a distracted employee or one that has their back turned. These loss prevention tactics can help to lessen the blow.

Manual Entry is Not Enough

Protecting high-performance categories like lottery, which are more vulnerable to theft, is critical to minimizing shrink. With an expected profit of $2,306 a month, or almost $28,000 a year on lottery alone, item-level inventory helps you protect that margin. Lottery books can be tracked in detail throughout the buying process: at each store, as they enter the site and are placed in the safe when they become activated for sale, sell out, and more.

Chances are your store is already using manual readings on clipboards or Excel to combat shrink. While these methods can provide some assistance, it’s often not enough. Understanding and improving your lottery efforts is a key driver in boosting sales and consumer engagement.

By empowering employees with the right tools and lottery management solutions, you can reduce shrink, as well as manual entry, saving hundreds of dollars a month, and avoiding burying managers in time-consuming, error-prone work.

You can thrive in today’s digital economy. Contact us today, to learn how we can help you transform your business.