One glance at the second European Retail Theft Barometer published in September last year would tell you that the UK continues to top the European ‘league’ for retail theft and shrinkage (News Update, Security Management Today, February 2003, p9). Despite the best efforts of security professionals to combat the problem by turning to source tagging and other security systems, crime still appears to be on the increase. That could largely be due to the number of thieves who re-offend.
At present, retail theft costs more than car crime and domestic burglary across Europe, but uses less police and Court time than either of those offences. Retailers believe that a main cause for this is the perception of shop theft as being a ‘victimless’ crime.
Whether it’s an individual, an organised gang or dishonest staff, the truth is that retail theft costs billions of pounds a year in lost sales. Therefore, until such time as harsher sentences are in place for persistent offenders, it’s very much the preserve of retail security systems providers to offer technological solutions that will help combat this seemingly ever-growing shrinkage problem.
The third European Retail Theft Barometer, to be published at the end of May, will also look at the whole issue of offender sentencing.
A totally independent study carried out by leading academic Professor Joshua Bamfield (of the Centre for Retail Research in Nottingham), the Retail Theft Barometer has sought the views of retailers and their security managers on all aspects of the current criminal justice system – from police response times to the number of successful prosecutions and the scale of fines and prison sentences being handed down across the European states.
With organised gangs of criminals and drug abusers stealing to feed their habits, the report asks a hugely salient question: are police forces in Europe more or less lenient than in the UK and, if so, what are the lessons we might learn from the different levels of re-offence?
Tip of the theft iceberg
The report should certainly make for interesting reading. Anecdotal information suggests many retailers claim that, whatever the figures show, they will be but the tip of a very large iceberg.
The general feeling is that the low rate of prosecutions is a disincentive for retailers to report the crime, which in turn makes it easier for re-offenders. In the UK – the worst offending territory throughout the whole of Europe – the findings will be sent to the newly-established Business Information Crime System (a Home Office-established unit with a broad database of information dedicated to tackling front and back-of-store theft).
The second European Retail Theft Barometer showed that stock shrinkage increased by 5% compared with the previous year, costing the retail sector more than GB pound 19.2 billion. This equated to a human cost of almost GB pound 50 per head of population of the territories polled, compared with GB pound 47 in 2001.
According to the second report, the UK continues to be the worst affected area with a shrinkage rate of 1.77% (1.76% in 2001) – well ahead of the other countries surveyed, although the increase was in truth less significant than that experienced elsewhere. Norway boasted the second highest shrinkage rate with 1.59% (1.56% in 2000) followed by Greece (1.53% compared to 1.44% in 2000) and France (1.49% against 1.42% for the previous 12-month period).
A notable trend that has emerged is the dramatic increase in other countries. In Denmark, for example, shrinkage had increased 9.1% from 1.21% in 2002 to 1.32%. Likewise, Italy saw an increase of 8.5% (1.41% compared with 1.30% in 2000) along with Ireland, which presided over an 8.1% rise (1.34% against 1.24% back in 2000). Belgium’s retail shrinkage rate, meanwhile, has increased by an estimated 6.3%.
Items on the thieves’ agenda
Vulnerable items on the thieves’ ‘shopping list’ continue to be the high value and aspirational branded items including clothing, alcohol and cosmetics. Thieves are also continuing to help themselves to Do-It-Yourself goods, as well as batteries and computer games. The worst affected retailers continue to be Department Stores and non-food outlets. Practically none of these items are essential to the sustenance of life. They are stolen for re-sale to feed drug addiction or to provide some additional cash.
Although despondent about the problem, many more retailers are now taking direct action through the targeted deployment of CCTV, source tagging and the installation of sophisticated electronic article surveillance (EAS) – such as digital radio frequency tagging applied at the point of manufacture.
A large proportion of retailers who responded to the survey have started to use EAS in some or all of their stores, while two-thirds of those questioned claimed that it would curb shrinkage. Security managers reported that, where source tagging technologies had been introduced, it had indeed helped reduce shrinkage. The number of categories source-tagged has also increased from 19 last year to 61 in 2002, a massive hike of 221% (which equates to something in the region of 4% of total turnover).
However, retailers issued a warning that although source tagging was seen as a valuable weapon in the fight against theft, more co-operation was needed from manufacturers in order to realise its true potential.
A total of 67% said that source tagging would be helpful or very helpful in the fight against shrinkage, but 42% said that manufacturers had been less than co-operative in its implementation. This can largely be put down to understandable – but nonetheless unfounded – concerns about the need to make costly changes to their production or packaging processes.
Resistance from commercial buyers
Resistance is also to be found among commercial buyers. While source tagging on the surface makes a product more expensive, security system buyers need to see the bigger picture in terms of how much money it will actually save them in the longer term.
For example, retailers in the apparel sector (which still largely uses hard tags as they’re believed to be a better deterrent than hidden tags in swing tickets) could save a great deal of staff time if product was source tagged. Doing so would eliminate the need to apply tags in-store, and staff could concentrate on selling product and policing the store. Source tagging also avoids the potential damage to a garment that a hard tag may cause.
With multiple retailers such as Sainsbury’s and other large supermarket chains now stocking clothes, DIY products and electrical goods as well as traditional ‘grocery’, it’s likely that we could well see the emergence of a standard in retail security technology.
An overall reported rise of 5% in retail shrinkage is alarming, and thus its beholden upon systems providers to produce the right technologies and equipment to tackle the problem, bring it under control and (ultimately) eliminate it altogether.
It’s encouraging that the use of source tagging and CCTV is increasing across mainland Europe. This is in spite of some noticeable cultural differences to security across the continent. For example, in the UK retailers want to encourage greater footfall via broader shop entrances and discreet doorway security systems. In European hypermarkets, however, there are more alarms at the point of sale where checkout staff are located.
Looking to the future, an interest in the sharing of best practice at the front and back of stores to reduce shrinkage throughout the supply chain is beginning to emerge. And, as we move closer to radio frequency identification solutions, we’re likely to see a greater deterrent impact and less system error.
Government backing also demonstrates that the problem of retail crime is being taken seriously. Hopefully, in time the UK will finally relinquish its unwanted position at the apex of the retail theft and wastage league.
