“Disturbing” rise in supermarket losses

33% surge in retail losses at UK’s top supermarkets
WATCH PROF BECK DISCUSS THE RESEARCH  

For immediate release  

• Losses up one-third across all categories, compared to pre-pandemic levels
• Industry experts identify 10 reasons driving an increase in shoplifting
• The industry response is reshaping our retail spaces  

[Brussels, August 16, 2023] Leading UK supermarkets are taking action to tackle a “disturbing” 33% increase in retail losses compared to pre-pandemic levels, ECR Retail Loss can reveal. A benchmarking research session between loss prevention and finance leaders from ten top UK retailers, with a combined turnover of £192 billion, provided insights into the risk landscape, with shop theft an area of considerable concern. The session, hosted by ECR Retail Loss, saw each of the industry leaders share anonymised details of their shrinkage run rate expressed as an index compared to 2018. Also included in the research session was commentary and insights from the retailers as to what’s driving the losses and their responses to it. “What’s disturbing is, compared to the pre-pandemic levels of 2018, on average losses have gone up by one-third. For some, it was more than a 50% increase,” says Prof Adrian Beck, who was part of the benchmarking research session. “The industry is under strain in terms of losses. Now we can actually put a number on it. We might expect increases in categories regarded as most vulnerable to theft, such as health, beauty or beers, wines and spirits. But it is pretty much across the board. “These levels of loss across the grocery sector are something we haven’t seen for an awfully long time. It’s unusual to see such a large increase in a short period of time.” “Increasing shrink is a clear and present challenge for retail. At ECR Retail Loss, we’re proud to bring together leading experts to share ideas and knowledge that will help the retail industry sell more and lose less,” says John Fonteijn, Chair of ECR Retail Loss.

What’s driving the increase?
“These are big numbers. A lot of this can be explained through external theft. The companies that took part feel that more people are stealing from them,” says Prof Beck. Prof Beck believes the reasons for this are complex, but he identifies ten key drivers of increased theft from supermarkets today:  

1. Violent criminal gangs targeting retail stores, believing it’s low risk for high reward.
2. Adverse economic conditions and inflation leading some to steal everyday items.
3. A legal framework downplaying significance and penalties associated with retail theft.
4. Police and the courts overwhelmed by a lack of resources and a backlog of cases.
5. Not enough staff monitoring self-checkout terminals to deter opportunist theft.
6. Retail ‘non-engagement with thieves’ policies designed to protect store staff.
7. Lack of clarity around training, equipment, and backup for in-store security guards.
8. Increase in social media posts of retail crime sprees inspiring copycat behaviour.
9. More open-plan store designs make theft/looting easier to do and harder to stop.
10. More opportunities to sell on stolen goods, especially via online platforms.  

How is the retail industry responding?

To combat the alarming rise in losses, retailers are actively adopting various strategies to safeguard their business and prevent further price rises being passed on to consumers. Measures include increased use of technology, such as video surveillance, locking trolleys, product tagging, and improving store design to create “zones of control”. “Retailers are not sitting on their hands. A lot of companies are clearly concerned about the level of increasing loss. Addressing it requires a multi-layered approach,” says Prof Beck. “We’ve seen a broad range of approaches around using different technologies, more guardianship, changes to store processes, and how retail spaces are designed. “We had a period when stores were opened up. Now there’s a sense of trying to close them down, to create what I call zones of control, such as having more barriers people must pass through to control the flow.” ECR Retail Loss will bring together the panel of industry experts again in November to track progress on whether retailers are being successful in reversing this disturbing trend in retail losses.  

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For more detailed insights or interview requests, contact:
Chris Reed, chris@restlesscommunications.com 
Colin Peacock, colin@ecrloss.com

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