Retailers lose huge amounts of money each year due to shoplifting. It's time to take the issue seriously and find ways to minimise losses
It is a well-known fact that shoplifting is a global problem. Every day people walk out of stores with items that are not theirs. It happens everywhere, regardless of nationality, income or perceived social standing. Retail theft is a worldwide epidemic that shows no sign of abating - and nowhere is it more apparent than in the UK.
Last year, store crime cost UK retailers a staggering £3.9bn, according to Checkpoint Systems' Global Retail Theft Barometer (GRTB), conducted by the Centre for Retail Research. We were one of the worst offenders in Europe - not a statistic to be proud of. But while most retailers are working hard to combat this problem, others just see it as a necessary cost of doing business.
The Competition Commission recently reported that some retailers were transferring 'excessive' risk to their suppliers to cover their own losses. Changing this will put retailers under even more pressure, given today's economic difficulties.
But why is retail crime so high in the UK? The answer is very simple: we are not spending as much on security as we should be. Last year more than 38% of stolen items had been left unprotected.
Advances in secure technology and solutions have increased protection for retailers more than ever before. However, it is alarming that so many items still remain unprotected.
Indeed, in the competitive retail industry, loss from theft can significantly affect a retailer's financial performance. On average about 1.34% of turnover is written off each year due to shrinkage - a significant amount for any company to see just walk out of their doors.
Securing stock is vital and using integrated technology security solutions is the best method to ensure protection. Some retailers do recognise this and a third of loss-prevention budgets are focused on 'smart' technology solutions.
Electronic Article Surveillance (EAS) continues to be the most common and effective method of protection used on vulnerable product lines. These include video games, DVDs, spirits and clothing, to name but a few.
Source tagging has also continued to grow, and is now used by 39.7% of European retailers. These multi-function solutions not only protect retailers from external shoplifting, but also the less talked about but increasing problem of employee theft, which currently accounts for 34% of all shrinkage, at a cost of £1.3bn.
All parties should take responsibility to ensure protection against shrinkage. Manufacturers, retailers and security providers need to work together to make sure everyone wins. Packaging needs to be secure throughout the supply chain, from source to product displays in retail outlets. Utilising loss-prevention systems ensures products are protected and monitored, helping retailers sell more and lose less.
If technology were utilised to its full potential, retailers could save themselves, and their suppliers and customers, millions of pounds.
Giving shrinkage the respect it deserves by putting it on the boardroom agenda, rather than thinking of it as a function of doing business, can go a long way towards strengthening market position in these challenging times. At the same time it will help to ensure that shoplifting statistics do not continue to rise and ultimately eclipse sales figures. n
Neil Matthews is vice president of Checkpoint Systems UK