Store Audits Reveal Benefits of Peer Review

In some circles the word “audit” is considered a four-letter word—tax, financial, and operational audits are things to be feared and avoided. But since the early 1990s, co-ops in the Midwest—now a chapter of the National Cooperative Grocers Association (NCGA) central corridor—have returned “audit” to its status as a five-letter word. These co-ops have worked collaboratively to help each entity realize its greater potential.

This is not your ordinary audit, complete with bean counters and notes to financial statements. Instead, it’s a process designed with the cooperative principles and missions in mind.

By request of the managers

Audits are actually a highly desirable activity for members of this group, requiring an official request from each store’s manager to be added to the queue. New as well as long-term members of NCGA get in line to host a meeting and enjoy the privilege of having their peers visit and audit them. The host store’s manager prepares for the audit by giving these peers a list of items that they are reviewing.

The store audit process has evolved over the last decade from a simple checklist of “does well” to “needs improvement” into a tool tailored by each manager to learn about co-op operations. Managers (and a few key staff) learn things they might be otherwise too busy to stop and notice, or in some cases things they simply do not know. Some historic examples have included: signage issues, expansion plans, financial management, inside/outside, ingress/egress, traffic flow, product department management review, value added activities, IT, how to deal with the psycho shopper—and the list goes on.

This is an organic process that normally is a positive experience for all parties involved. It is common for those conducting the audits to benefit as much as those receiving the input. Ultimately, store managers can use this peer review to solve operational issues; to grow and develop the skills of the management team; and to prepare the manager to facilitate board education on growth and market-change issues.

An indirect but equally beneficial result of the audit is the “first impressions” that outsiders from your member community can provide. This technique is commonly used in other industries because it provides professionals input from those who share the same questions, struggles, and objectives.

Improved performance and accountabiiity

The desired goal is to improve the performance of individual co-ops across the region and to foster accountability among the core management, all in a confidential environment. Peer visits also highlight the positive, especially when the host co-op shines and performs in the upper fourth.

Though this audit process is not for everybody, it continues to be beneficial and sought after by the Midwest chapter members. Willy Street Co-op has used this process to improve signage, customer traffic, and store aesthetics throughout the retail floor, as well as product selection, merchandizing tools and aids, and category management. To reiterate how mutually beneficial this process can be: Willy Street Co-op received the direction for these abovementioned improvements by both performing and receiving the peer audits.

Logistically, the Midwest group has traditionally scheduled audits in the fall and spring of each year. The visiting managers are generally divided into teams, targeting the talents of individuals on a particular area of operations. Each team completes the review form and the results are discussed and reviewed between the visiting managers and the host co-op manager. To complete the process, the visiting management team sits down with the host co-op management team to review the results. The final audit is assembled in a collated report for future reference.

Top Ten

The store audit has become a positive reality check for the Midwest cooperative sector. With the ever-changing grocery and cooperative market, all co-ops need creative ways such as these peer audits to honestly review and improve our performance.

Compliments of Dan Gillotte from the deep Midwest (Austin, Texas), here are the Top Ten reasons why co-ops everywhere should do store audits:

#10 You’ll find new and different ways to say, “We have some good news and we have some bad news…”

#9 An audit connects management team and staff to this nebulous “NCGA thang.”

#8 It gives you a critical eye for your own store that will allow you to right chronic problems (like finally moving the incense out of the deli case).

#7 The group of general managers will suggest that you greatly reduce your general merchandise selection and then also be the department’s best customers during their visit!

#6 Follow-up is guaranteed (practically) to close your CoCoGap.

#5 It helps you to use terms like CoCoGap with a straight face.

#4 An audit allows you to understand that every co-op is special, but we share that same crazy customer.

#3 It gives the manager an excuse to actually schedule a good cleaning of the store.

#2 Get group hugs in the bulk aisle.

And, the number one reason to do store audits:

#1 We’ve only had one fist fight over them in our entire history!

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Anya Firszt is general manager of Willy Street Co-op in Madison, Wisconsin (gm@willystreet.coop).