The newly-released theft barometer from Prof Joshua Bamfield, a shrinkage survey of retailers across Europe, done with product firm Checkpoint.
The 2006 costs of retail crime per head in the UK were £72.56, or £174.14 per household. This is made up of theft by customers, staff and suppliers and security costs. The figure of £174.14 per household means that every year members of every household have on average to work more than three days for nothing, to meet the costs of retail crime.
The report concludes that some commentators 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, international organised crime often linked to trafficking, drug-related retail crime, fraud, extortion, and growing levels of violence against staff. It ignores also the cost of retail crime to the British public, which will be £72.56 per person this year. As always there are no easy answers to the problem of retail crime. Retail crime occurs in hundreds of different ways and so requires many different approaches to limit its effects. UK retailers have shown a willingness to adopt new techniques that have had a resounding impact on UK shrinkage rates. Their efforts are not supported by a regime to decriminalise shoplifting through Fixed Penalty Notices and recommendations that shoplifters must never face the danger of going to jail. Future editions of the barometer will show whether the momentum of UK security chiefs can be maintained.
RFID
So far, RFID can be accused of being all talk and no action, but there is evidence that over the next few years, the technology will take off.
The great majority of retailers surveyed viewed RFID as a technology that would primarily be used for inventory control and distribution (85.4pc of retailers). Security and loss prevention was seen as the second most important application (62.9pc of retailers). Other possible applications were merchandising (20.9pc) and customer self-scanning (12.5pc).
RFID is a radical technology whose impact on retailing is likely to exceed that of EPOS. It is capable of delivering considerable security benefits. It can be linked to other security devices to inhibit bulk theft (or ‘shelf-sweeping’), it may be used as evidence to show that an item has not been legitimately acquired, or is counterfeit, and RFID may help to reduce refund fraud. The technology is not without controversy however.
The greatest priorities for RFID were seen as the most-stolen lines such as Spirits/ champagne, Small electrical items, Cosmetics and Skincare, Perfumes, DVDs/CDs and Videogames, computer software.
Piloting and implementing RFID
Figures showed that in the next twelve months 15.5pc of major retailers expected to pilot RFID and a further 22.1pc within two years. This implies that, if all goes to plan, more than one-third of large retailers (37.6%pc) will have started RFID pilots by 2008/9 and some retailers will have completed them.
The implementation of RFID was expected to take longer. Only 7.3pc of retailers thought they would be implementing RFID in two years’ time, but within four years a further 32.6pc expected to be at the implementation stage. This is a combined total of 39.9pc of large retail businesses. Within six years, this combined total increases to 62.6pc as another 22.7pc expect to be implementing RFID. This is extremely positive for the takeup of this new technology.
Protection methods
For the first time, the European Theft Barometer has produced figures for how a sample of the most-stolen lines are protected in store. We are not aware that these data have ever been produced or published elsewhere. After games, razors are the most heavily protected lines with only 17.9 per cent without any protection at all. The most common means of protecting razors is EAS (28pc), followed by safers (26.6pc), locked cabinets and shelves (14.9pc), ticket systems (8.8pc), and loop alarms (3.8pc).
European figures
The total shrinkage costs suffered by Europe’s retailers in this period were equivalent to £19,609 m. Customer theft was £9,562 million (48.8pc of shrinkage); employees £6,027 million (30.7pc); suppliers £1211 million (6.2pc of shrinkage); and wastage and internal error £2809 million (14.3pc). The countries with the lowest rates of shrinkage were: Switzerland (0.92pc), Austria (0.96pc), and Germany (1.07pc), much as in the first report. The highest shrinkage rates were in: the Czech Republic (1.42pc), Slovakia (1.40pc) and Hungary (1.38pc). In Western Europe, the highest shrinkage rates are seen in Finland and Portugal (both 1.34pc) and the UK (1.33pc).
Security costs
Annual security spending by UK retailers has risen from £540.3m in 2000 to £979.2m in 2006. Staffing costs accounted for just over half, 52.9pc (£517.9m) of this total and 23.4pc (£229.1m) was spent on security equipment.
All UK figures are based on information from a structured cross-section of 43 retailers across different kinds of business, operating 7,322 shops, and with a combined turnover of £279,925 m.
Meanwhile internal error and waste has fallen from 19.0pc to 14.3pc of shrinkage, showing that UK retailers have not only cut crime but also improved retail processes to cut losses attributed to wastage.
