Product Recall — Regional Grocery Chain
When a Salmonella outbreak was traced to a regional grocery chain, the company pulled all lettuce from its stores, including its highly profitable salad bars.
The professionals of RT Forensic Accountants were engaged to quantify the resulting loss of profits across dozens of stores in the Midwest.
- Industry
- Grocery retail
- Peril
- Salmonella outbreak traced to lettuce
- Coverage
- Product recall / business interruption
- Result
- Approximately $1 million in business interruption recovered across dozens of stores
The Loss
The loss was complicated because the stores stayed open and foot traffic did not actually decline. The insurer also wanted to credit an increase in fresh produce sales against the claim, without looking at the rest of the store.
The Process
We analyzed sales across the whole store, not just the produce section, and showed that salad bar customers typically buy other goods while they shop. With the salad bars closed, overall store sales fell markedly, even after including the increase in produce sales.
The Results
The company recovered approximately $1 million in business interruption across dozens of Midwest stores.