1. Loss Prevention, Auditing & Safety Conference 2009 Title Sponsor:

2. Cycle counting as a foundation to exceptional shrink performance Tim Fisher Best Buy

3.  Consumer electronics store  1,023 stores domestically  Over $40 billion in revenue  140,000+ associates  Family of Brands

4. Why cycle counting is important to Best Buy accountability Leadership engagement Awareness/ Communication Inventory Integrity Best Buy’s “Shrink” Program

5. Why cycle counting is important to Best Buy  Physical Inventories only provide insight once a year  Cycle counting provides the how behind inventory integrity on a weekly basis  Cycle counting creates transparency  Gives visibility to losses which provides motivation for stores to act  Provides not only insight into losses but drives in stock  Allows count corrections to adjust inventory

6. How Best Buy cycle counts  Counts are done weekly and reconciled against current on hands  Stores have a dedicated “counter” to perform counts and reconciliation  Focused on high loss and high turn items  Eighty percent of counts are centrally driven based on actual physical inventory trends  Twenty percent are locally driven based on market and individual location identified needs  Anticipated shrink rate is calculated and published weekly  Down to the department and subclass level

7. Cycle counts

8. National Shrink Barometer

9. What Best Buy get from cycle counts  On a dollar for dollar basis the night of Physical Inventory we have already identified between 90% and 96% of our shrink.  Benefit in in-stock/inventory integrity  Creates confidence for assume receipt of DC trailers and approved drop ship vendors  Facilitates PO/invoice matching to speed reconciliation and vendor payment  Reduces chargeback's and invoice disputes

10. In stock position