Crime and other forms of shrinkage cost UK retailers £4.9 billion in lost stock over the last year, new research has revealed today.
The Centre for Retail Research’s (CRR) annual Global Retail Theft Barometer, sponsored by Checkpoint Systems, showed UK loss from crime or error rose 6.2 per cent in 2011 whilst across the globe it grew by 6.6 per cent and totalled $119.09 billion (£75.69 billion).
India by far has the highest shrinkage rate of any nation surveyed in the report, with loss representing 2.38 per cent of sales in the country, whilst the UK came 26th out of 40 nation with 1.37 per cent, a lower rate than the US, France, Italy and Sweden.
“Although there are commentators who view retail crime as a harmless or intriguing social phenomenon or simply as a cost of doing business, this ignores the impact of criminal gangs, growing levels of violence against employees and customers, and the links between retail crime and drugs, fraud and extortion,” said Professor Joshua Bamfield, Director of CRR and author of the study.
“Moreover, retail crime on average cost families in the 43 countries surveyed an extra €149 on their shopping bill, up from €139 last year. In Europe, that figure was €150.”
According to CRR shoplifting was the most prevalent form of shrinkage across the globe in 2011, with 43.2 per cent of all loss caused by it, followed by 35 per cent as a consequence of employee theft, 16.2 per cent created by internal error and just 5.6 per cent attributal to suppliers or vendors.
Despite using more security tags than any other region, Europe saw the largest increase in shrink rate during the year, a rise of 7.8 per cent, but Bamfield argues that the key to reducing loss is about investing in the right sort of prevention and security measures.
“Of the top 50 global retailers who responded to the survey, the ones which reported a decline in shrink from the previous year did not construe loss prevention merely as a matter of theft, but worked across their operations to systematically combat shoplifting, employee theft, vendor loss and administrative errors.
“Ninety-six percent of these retailers’ stores used audit programmes to monitor the use of loss prevention policies and above all, the retailers increased their loss prevention spending almost twice as much as the global average.”