Checkpoint Systems’ Global Retail Theft Barometer (GRTB) is a study conducted by the Centre for Retail Research across 32 countries worldwide.

It found that in the UK retail theft is costing every household £150 per year, compared to £194.01 in the USA, and an average of £115.18 in Europe, as consumers end up absorbing this cost.

Impact of drop in security 

Retail crime across Europe increased to £22.2 billion, according to the latest report by Checkpoint Systems. Total retail shrinkage reached £20 billion, demonstrating the impact of the drop in security spend over the same period, which decreased by 0.3 per cent to £5.3 billion. Retail shrinkage is the cost of customer, supplier and employee theft plus internal error.

This was also reflected in the UK with the total cost of shrinkage only dropping 3.3 per cent to £3.8 billion, which is 1.34 per cent of retailers’ turnover, generating a rise of 0.8 per cent from 2006.

The amount spent by UK retailers on security declined drastically by 22 per cent to £769 million, highlighting the importance of ongoing investment in tackling shrinkage issues.

Loss from theft can significantly affect a retailer’s financial performance in the competitive retail industry. Securing stock is vital and using integrated technology security solutions are the best method to effectively ensure protection.

This is recognised by retailers, with a third of loss prevention budgets focused on ‘smart’ technology solutions. These protect retailers not only against the external threat of theft, but also the increasing internal issue of employee theft.

Disloyal employees

Customer theft, which includes opportunistic shoplifters and organised gangs, accounts for the largest loss of stock in all territories apart from North America, where only 35.2 per cent is attributed to customers and 45.8 per cent to disloyal employees.

Employee theft is a growing concern in all countries surveyed as part of the GRTB. In the UK 34 per cent of theft is due to staff, resulting in a cost of £1.3 billion.

Across Europe, ‘vehicle parts, DIY and building materials’ stores stated the highest levels of shrinkage in 2007, at 1.7 per cent of turnover. These were closely followed by ‘clothing and accessories’ outlets, along with ‘newsagents’ that recorded a loss of 1.69 per cent of turnover.

‘Footwear’ stores noted the lowest level of theft at 0.67 per cent, however, it was one of the biggest rises from 2006 by 7.7 per cent, together with ‘office suppliers’ (12.5 per cent) and ‘off licences’ (11.1 per cent).

The retailers with the biggest decline in shrinkage were toy shops (-9.6 per cent) and jewellery stores (-8.6 per cent).

Most frequently stolen products 

The global retail theft barometer identified that heavily-branded expensive consumer goods are most at risk because they are desirable or can be sold on easily. The most frequently stolen European products, in rank order, are alcohol, cosmetics and skincare, women’s wear, perfumes and fine fragrances, razor blades, DVDs and CDs, children’s wear, accessories, designer wear, and high-priced specialist foods, such as fresh meat, ham and cheese.

Despite this, the GRTB found that 38.5 per cent of the most stolen items still remain unprotected.

Neil Matthews, vice president of Checkpoint Systems Europe, said that it will ultimately be the consumers that pay the price for rising retail theft.

“Over the past year, the level of investment in security has dropped. This has resulted in a detrimental effect on the level of protection and, therefore, the profit margins for retailers,” he added.

Advances in innovative security technology and solutions, such as IP-CCTV, data analysis software and source tagging, have increased the protection for retailers.

“The importance of security is widely acknowledged, but I am shocked that 38.5 per cent of the most stolen items still remain unprotected. Retailers must put the investment where their mouth is as there is a clear link between spending on security and the amount of shrinkage experienced,” Matthews said.

Video games, DVDs, razors, spirits and trousers were among the most protected items according to the GRTB. Electronic article surveillance (EAS) continues to be the most common and important protection utilised by retailers to combat shrinkage and is currently used on an average of 34.8 per cent of vulnerable product lines.

Source tagging has continued to grow with 39.7 per cent European, 45.2 per cent North American and 27.4 per cent Asia-Pacific retailers recognising the benefits of this advanced technology. The report found that a further 29.6 per cent of European retailers expect to introduce source tagging within the next two years.

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Related links

• British Retail Consortium
• Checkpoint