What is the real cost of crime on the nation's retailers?
New research into the impact of crime on small and medium sized businesses has emerged, revealing rare figures on the crippling cost for players in the Australian retail industry.
The study, conducted by ADT Security late last year, has been touted as Australia’s most comprehensive research into the impact of crime on small and medium sized business, and is the company's second ‘Small Business Crime’ report to be released.
The firm surveyed more than 500 small-to-medium business owners (SMBs) and 500 SMB employees across Australia to compile the research, which revealed that one in five SMBs lose more than 10 per cent of their annual profit to theft each year.
The study also found that the vast majority of Australian small businesses have suffered financially at the hands of crime, with three in five businesses (60 per cent) losing five per cent of their annual business profit to crime.
More than one in three small-to-medium businesses employees have been a victim of crime in their workplace (36 per cent), with burglary the most prevalent type of crime reported.
Fifty-five per cent of SMBs have been a victim of burglary at some stage, according to the survey findings, followed by other employee theft of merchandise (27 per cent), shoplifting (26 per cent), and vandalism (25 per cent).
Employee theft of cash (22 per cent) also rated highly, and fraud was encountered by 16 per cent of SMBs.
A quarter of SMBs (25 per cent) said they had noticed a rise in crime in 2012 compared to the previous year, with factories and warehouses reporting the greatest financial loss from crime.
Service station/convenience store and retail workers are those most likely to have dealt with crime in the workplace (67 per cent and 64 per cent respectively).
Armed robbery was also identified as the crime that had the strongest impact on the business (73 per cent).
The main security measures used by businesses are the lock and key (63 per cent), an alarm system (44 per cent), locked safe for valuables (24 per cent), CCTV (19 per cent) and window bars/bollards (17 per cent).
However, alarmingly, the survey also revealed that 14 per cent of SMB owners don’t take any security measures to protect their business.
Commenting on the survey, ADT Security managing director Mark Norton said the study has revealed the most valuable insight into small business security measures and perceptions since the company’s inaugural survey in 2010.
“Although crime affects all business
– large and small; retail stores, warehouses, restaurants and
offices – it is especially devastating for small businesses. The
potential for the loss of profit and merchandise to overwhelm an SMB
is high, as well as the financial loss incurred due to property
damage, business disruption or closure and lost customers and orders
– not to mention the threat crimes like robbery pose to the
physical safety of customers and employees,” he said.
“The
retail sector in particular has been hit hard in the last five years
so now more than ever, protecting profit is crucial. Business owners
need to seriously think about how to best secure their premises –
and weigh up the cost of losing stock, cash, sensitive information as
well as the risk to employees and customers if they don’t.
“While
it is impossible to completely eliminate the risk of crime, business
owners can help by implementing a comprehensive security plan,
thoroughly training employees in how to operate and respond to the
security system, identifying security threats and troubleshooting
potential weaknesses.”
ADT Security is the world’s largest
electronic security company and aims to provide cost-effective
security solutions specifically for small businesses.
Last
year, ADT Security commissioned online market research panel Core
Data to conduct this survey of 500 small business owners and 500
small business employees around Australia during October 2012. For
the purposes of the research, small business was defined as less than
50 employees.