Crime cost retailers £2.34 billion last year, according to a recent survey conducted by conference series Retail Risk London, and the UK Retail Fraud Survey 2016.
Employee theft was identified as the single biggest cause, with 68% of retailers citing it as their top area of loss.
Published by Retail Knowledge and sponsored for the second consecutive year by WIS International, the survey is the most extensive report into the systems, processes and strategies of the UK’s top retailers available, and covers retail transactions accounting for some 32% of all UK retail sales online and offline through 34,950 stores across the UK.
Shrinkage rates vary by retail sector from mass merchants and department stores at 2.68% of sales to a low of 0.25% of sales for hospitality and leisure retailers. However, mass merchants and department stores have seen a massive increase in shrinkage rates since last year, of 58% whereas hospitality and leisure retailers have seen a decrease of 38%.
Paul Bessant of Retail Knowledge comments: “Over the past few years the retail landscape, with the advent of omni-channel retail, has changed beyond all recognition, and with it, so has Loss Prevention. The nature of threats with which the LP department is now expected to deal has changed too.”
Paul continues: “With this redrawing of the lines of risk comes increased responsibilities for those who traditionally confined themselves to a narrower LP function, as well as greater opportunity to support and contribute to the business. The signs are that these new approaches are working well, as you will see by this year’s shrink figure and the Survey on the whole. However, it is also clear that there is no room for complacency.”
Steve Simmonds of WIS International, says: “I know from my conversations with retailers that the value placed on this information is very high. The survey provides a unique insight into what issues are emerging in the world of retail risk and loss prevention and allows retailers to both benchmark their own performances as well as prioritise areas where others are already being challenged and they may well be too. It also allows those who supply solutions to the risk and loss prevention market to better understand where challenges are being posed, and to help produce solutions most relevant to a constantly evolving market place.”