Supermarkets, like other retail outlets, are facing significant disruption in the way customers shop for food.
Competition ranges from local farmers' markets, multinational chains, retail-giant Amazon, specialty stores like Whole Foods and Trader Joe's, and mass-market outlets like Target and Walmart.
To attract and retain customers, many supermarkets are adding products and services, but they're also increasing their risks as they do.
One of the supermarket industry's prime concerns in the past — preventing slip-and-fall incidents — remains important, but other concerns have arisen as well, for example, tainted food and criminal activity. According to a recent report from Chubb, "Supermarkets: Addressing the Risks in an Evolving Market," because a situation involving bodily injury can happen at any store — even one with an outstanding safety record — supermarkets should assess whether their excess and umbrella coverage is adequate for losses that may reach into the millions of dollars.
A comprehensive assessment of their exposures, risk management strategy and insurance program can help supermarkets ensure that they are taking appropriate steps to protect their business and keep customers and staff safe.
Here is a look at 10 of the risks that supermarkets face today, along with some suggestions for mitigating those risks from the Chubb report.
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1. Third-party discrimination
Store management has a responsibility to maintain an appropriate environment for customers and employees, the Chubb report points out. That includes proper background checks and training to ensure that employees treat customers and each other in a suitable manner.
Managers should be attentive to any indications that employees are discriminating or humiliating others on the basis of age, disability, race or ethnic origin, religious affiliation or sexual orientation.
Hiring, training and oversight are key to stopping these situations before they occur.
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2. Alcohol sales
If your supermarkets operate in states that allow them to sell beer, wine or even hard liquor, you have another layer of risk, the report notes. Although alcohol can represent a significant portion of a store's sales, it's critical to have a stringent policy of checking identification to reduce the risk of sales to underage individuals.
Stores may also need to consider a policy limiting the amount of alcohol that any one customer can buy at a time, and monitor their parking lots to keep patrons from drinking on the premises. Selling beer and wine to customers for consumption in the store along with prepared food adds even more risk.
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3. In-store pharmacies
Shoppers love the convenience of in-store pharmacies so they can have prescriptions filled while they shop and health care clinics so they can get flu shots outside the normal hours of a doctor's office. But for the stores, the report highlights additional risks from an increased potential for crime as well as druggist liability related to an incorrect prescription or dosage.
One recommendation to manage risk, whether the pharmacy is owned by the store or contracted out to a third party, is to perform strict background checks for all personnel. Another recommendation is to keep the drugs secure with an appropriate recording and check-out system and keep the pharmacy locked during non-operating hours, especially if the store is still open.
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4. Slip-and-fall incidents
One of the most common and costly risks for supermarkets is the possibility that a customer will slip and fall. Chubb recommends that supermarkets assign staff to patrol the aisles regularly and clean up spilled liquids or dropped foods quickly.
In addition, changes in floor levels, whether ramps or stairs, should be clearly marked, and any uneven floor surfaces should be repaired.
Supermarkets have to pay careful attention to outdoor areas as well, removing snow and ice correctly in cold climates, and generally keeping walkways and parking lots in good condition.
One overlooked risk highlighted by the report is the child riding in a shopping cart who isn't sitting in the seat with the seatbelt on. If they're too big and riding in the cargo area, the children may tip the cart over.
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5. Tainted Food
Even though supermarkets generally buy product and food products from distributors, they remain responsible for what they sell in the store. To manage their risk if a problem arises with food purchased from a supplier, the report recommends that the vendor contracts include appropriate hold-harmless, subrogation and indemnification language.
If your store sells prepared foods and dishes, you have to monitor how the food is made and cooked, with strict quality control measures and standards.
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6. Daycare operations
Some stores offer daycare services or supervised play areas to allow parents to shop without little helpers. As with all operations involving children, supermarkets have to be especially careful that employees are screened thoroughly, the report notes.
The play area has to be adequately staffed and supervised to minimize the risk that a child will choke on a small item or wander away.
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7. Assault and battery, robberies
Robberies can occur in any store, not just at the convenience store attached to the gas station, which is the image most people have. To protect customers and staff, it's important to keep the parking lot well lit, with security personnel on site. The report also recommends that security cameras be visible so potential criminals know they're being monitored.
Store personnel should be trained to watch out for and report suspicious activities. The layout of the store should eliminate any dark or obscured areas where criminals can lurk.
Supermarkets that host banking operations may be a target for criminals. They may have to implement additional security measures to protect customers and staff from any harm that could result from a robbery of an on-premises banking operation.
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8. Fires
Fire sprinkler systems should be kept up-to-date and checked regularly by a licensed fire system contractor. Fire extinguishers should be maintained and inspected to ensure they're in good working order, and they should be placed appropriately throughout the store.
Staff should be trained in using fire extinguishers correctly as well as emergency and evacuation procedures. The report recommends regular fire drills to ensure that employees know what to do if a fire does break out and how to evacuate customers and staff safely.
If your store prepares food on the premises, cooking areas, particularly fryers should be cleaned and degreased regularly. Exhaust hoods and systems should be inspected for grease buildup, and cleaned.
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9. Tractor trailer deliveries
Loading docks can be hazardous places for supermarket staff and customers alike. Depending on the configuration of the parking lot and its intersection with the loading dock, trucks and cars can collide.
When the supermarkets have their own delivery fleets, there are additional risks, the report says. The store is responsible for making sure that drivers receive the appropriate safety training and that they're not texting or talking on the phone while the vehicle is in motion.
Supermarkets also have food safety concerns with refrigerated trucks, especially in the case of a breakdown, when frozen or cold products may not remain at the proper temperature.
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10. Fuel sales
Stores that have or are considering fuel sales need to ensure that they take the same precautions as other gas stations against the risks of fire and explosion. The fueling areas should prominently display "No Smoking" signs that are visible to customers and staff.
Employees also should monitor customers to make sure that they only put fuel in approved containers, and that customers who pump their own gas are doing so safely.
The report also reminds supermarkets to check fuel storage tanks regularly and monitor them to make sure that there are no leaks that could require expensive remediation.
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