Retail fraud in the UK is set to increase further in the months ahead, with new research indicating that the coalition government’s budget cuts are indirectly driving more consumers and retail staff to theft.
A Retail Fraud survey, commissioned by Retail Knowledge and undertaken by Martec International, found that almost 60 per cent of loss prevention executives believe shrinkage will get worse during the current parliament as the weak economy pushes people to “steal for need rather than greed”.
In the week that Office for National Statistics data revealed that youth unemployment is rising, the survey suggests that retailers are increasingly concerned about the link between high unemployment and shop theft.
According to the research the biggest area of loss for companies comes through shoplifting or external stock theft, representing 34 per cent of the overall shrinkage level, but employee theft is also a major concern and contributes 26 per cent to the total.
The study finds that investment in fraud management systems among businesses is low, while fraud related to returned goods is on the rise.
Presented at today’s Retail Fraud Conference in west London, the survey highlights ways in which retailers can stem fraud and theft, including ways to improve inventories and stock control.
Commenting on the findings, Managing Director of Retail Knowledge Paul Bessant said: “For the vendor community this report should act as a catalyst to reassess their approach to loss prevention based on actual retailer needs, especially at a time when their challenges and needs are on the increase and likely to continue upwards.
“It is our intention to make this an annual exercise in our commitment to working with the industry to showcase best practice and share knowledge to reduce fraud across the sector.”