Retail theft nears $3 billion mark

NATIONAL: Opportunistic retail theft is expected to intensify over the Christmas trading period, following a global report that found shrinkage is costing Australian retailers $2.26 billion per annum.

Key results from the inaugural edition of the Global Retail Theft Barometer (GRTB), a worldwide shrinkage study conducted by the UK-based Centre for Retail Research in Nottingham, found pilfering accounted for 1.39 per cent of annual sales in Australia. Of this 49.6 per cent occurred in checkouts or cash desks, 25.3 per cent on the sales floor and 27.8 per cent in the back office, delivery bay or stock room. 

Australian Centre for Retail Studies program director Andrew Cavanagh said while there was no precise data on its effect on national fashion retailers, he believed the figure was close to three to four per cent of sales - a number equating to billions of dollars each year.

"Obviously the peak shrinkage periods vary for each of these but opportunistic theft will increase during high traffic periods such as pre-Christmas and school holidays," he said.

Cavanagh predicted organised, supply chain and staff theft were more likely to occur when there were higher stock volumes, reducing the perceived risk of capture by retail operators. Figures from the GRTB indicate that 40.2 per cent of shrinkage was caused by employees, significantly more than consumer theft which accounted for 36.6 per cent. 

No current trends or statistics are currently available on the most commonly stolen items, but Cavanagh believed jewellery and other easily concealed merchandise accounted for a large portion of opportunistic theft.

"The organised aspect is very difficult to prevent in the long term," he said. "It is a career and as such, [perpetrators] will quickly find ways around initiatives retailers put in place." 

Although the Global Retail Theft Barometer found that Australian retailers spent proportionally the most on security measures, on average 0.35 per cent of sales or $506 million per annum, Cavanagh said this could be contributing to weaker bottom lines, rather than bolstering them.  

"Millions of dollars are spent on security systems each year [but] in apparel, it just seems to make it harder to try the clothes on. I often wonder whether fashion retailers would be better of spending the money on more, better or better paid staff."

ADT Security national retail manager Phil Brown disputed Cavanagh's argument, claiming that new 'store intelligence' technology meant any business could monitor and manage internal shrinkage discreetly.

He said the technology allowed retailers to gather information from all key data producing systems within the store including point of sale, electronic article surveillance, traffic counters, vendor direct store delivery activity and in-store inventory transaction data. 

"[Retailers] no longer have to wait for tips or a store audit to determine if action is required and a visit is necessary," he said. "Resources do not have to be significantly increased in order to attack shrinkage from all sides."

Earlier this year, Australian womenswear specialist Cue teamed with a publicly listed retailer to tackle the problem of shrinkage, sharing intelligence on suspected organised crime groups and individuals.

The partnership was prompted by the private company after it successfully laid charges against a woman for selling stolen clothing on online auction site Ebay. 

Cavanagh said more transparency and industry collaborations were needed to stamp out the problem.
"It is not an area where retailers are overly keen to talk about the real scope of the issue. I suspect from my discussions with apparel retailers that the figure [for fashion retail theft]now equates to billions of dollars."

By Assia Benmedjdoub