A 12% Budget Cut Across Three Retail Sites
A regional retail chain has three stores under one security program. Corporate cuts the guard budget by 12% for the next fiscal year. Store A is in a mall with 0.9 theft incidents per 1,000 customers and two prior robberies; Store B is suburban with high-value cosmetics and a 1.8% shrink rate; Store C is a flagship with a guard at the main entrance, a loading dock, and 14,000 square feet of sales floor. The current contract provides one unarmed guard per store during all open hours, 84 hours per store per week, plus a roving supervisor 20 hours per week. The client wants no reduction in visible presence at Store C because of executive visits. Data shows 61% of loss incidents occur at Store A between 18:00 and 22:00, and 47% of Store B's shrink is in cosmetics between 12:00 and 16:00. The guard company must respond in 10 days with options. There is no camera upgrade budget.
1. How should the guard company analyze the cut rather than spread it evenly? What data and stakeholders matter?
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Start with risk, not equal shares. The current program is 84 hours per store times three, plus 20 supervisor hours, for 272 hours per week. A 12% cut is about 33 hours per week. Spreading that evenly would cut about 11 hours per store and ignore the data.
Build a matrix by store: incident frequency and severity, shrink rate and location, layout, hours of loss, guard function (deterrence, access control, response), and client political constraints. Request 24 months of incident reports by hour and location; shrink by category and time; guard activity logs; response times; police calls; store-manager interviews; and the executive visit schedule. Stakeholders include the client security director, store managers, finance, the union, and local police. The executive-visit concern at Store C is a political requirement, not a risk finding; it must be priced and made explicit. The analysis should identify where hours reduce the most loss per dollar, not where hours are easiest to cut.
2. Propose three options with tradeoffs: one that protects the highest-risk hours, one that protects visible presence, and one that reduces hours evenly. Recommend one.
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Option A - Risk-weighted: Store A stays at 84 hours, with the guard shifted to 14:00-22:00; Store B drops from 84 to 75 hours, focused on 11:00-19:00; Store C drops from 84 to 70 hours; supervisor drops from 20 to 10 hours. Total 239 hours, a 12% cut. This protects Store A evenings and Store B's cosmetics peak. Tradeoff: Store C loses 14 visible-presence hours; mitigate by scheduling the supervisor at Store C during executive visits.
Option B - Presence-protected: Store A 84, Store B 63, Store C 84, supervisor 8. Total 239. This keeps the flagship entrance covered but cuts 21 hours from Store B, including some cosmetics peak. Tradeoff: higher shrink risk at Store B.
Option C - Even cut: each store 73 hours, supervisor 20. Total 239. Simple, but ignores the incident and shrink data and likely increases loss at A and B.
Recommendation: Option A. It follows the loss data, keeps the highest-risk store fully covered, and meets the 12% target. The executive-visit concern is handled by supervisor scheduling rather than by leaving static hours in place. Include a 90-day review: if Store A incidents rise more than 10% or Store B cosmetics shrink rises more than 0.2 points, restore hours from Store C.
3. What performance measures and review cadence would you put in the proposal to protect the contract?
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Use measures that show the tradeoff was managed, not just that hours were cut:
- Incident rate per 1,000 customers by store and hour.
- Shrink rate by category, especially cosmetics at Store B.
- Guard visibility checks and floor-presence logs.
- Response time to incidents and code calls.
- Overtime percentage and schedule compliance.
- Client complaints and executive-visit coverage.
- Officer turnover and training completion.
Cadence: weekly internal review for the first 30 days; monthly client review with store managers; formal 90-day business review. Set a baseline and triggers: if Store A incidents rise more than 10% or Store B cosmetics shrink rises more than 0.2 points, restore hours from Store C. Document client sign-off on the risk tradeoff so the guard company is not blamed for a decision the client approved. Offer a 30-day pilot with daily logs. This protects the contract by making the tradeoff transparent and measurable.