Losses from retail theft have had their sharpest increase in three years, a new report reveals, with new technologies and economic uncertainty contributing to the problem.
The fifth annual edition of the Global Retail Theft Barometer, conducted by the Centre for Retail Research in the United Kingdom, monitored the cost of “shrinkage” from July 2010 to June 2011.
The research reveals shrinkage in Australia has experienced its most significant increase in three years, with a 2.9% increase over 2010-11, translating into $1.94 billion for local retailers.
In Australia, internal employee theft remains the biggest cause of loss (40.5%), continuing to outweigh that of shoplifters (37.3%).
Mark Gentle, managing director of Checkpoint Systems Australia and New Zealand, says the rise of technology and online shopping is partly to blame.
“Greater accessibility to the internet, combined with the huge increase in popularity of online retail, has made internal theft even more appealing for Aussie employees,” Gentle says.
“Employees are not only stealing for their own use but also to make money… Some retailers have caught single staff members reselling over an astonishing $200,000 worth of stolen stock online.”
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New technology, such as self-checkout systems, is also impacting stocks, with items incorrectly entered or not scanned at the till.
While just 0.37% of Australian retail sales are spent on installing more robust security solutions, such as electronic article surveillance and secure merchandising products, there is an ongoing need to up the ante on thieves.
According to the barometer, the most stolen items include shaving cream, clothing accessories, outerwear, perfume and fragrances, and alcohol.
Gentle says that as we head into more turbulent economic times, the rising cost of commodities – such as petrol – will continue to put pressure on retailers.
“There is a clear link between countries suffering economic turmoil and increased shrinkage,” he says.
“Although our economy remains comparably strong, Australia will potentially follow the trend in the next year unless retailers continue to get tougher on the new threats facing its stock.”
According to Gentle, retailers will need to take a more holistic approach to loss prevention if they are to minimise their shrinkage in the year ahead.
“Retailers who recognise that loss prevention is not one single issue have the best results in reducing their shrink,” he says.
“There is a need to work collaboratively to combat shoplifting, employee theft, vendor loss and administrative or process error all at the same time.”