The UK’s grasp of the ‘shoplifting capital of Europe’ title is under threat, according to the latest European Retail Theft Barometer (ERTB) survey of retail crime.
The UK still rules the waves in terms of overall ‘shrinkage’ – loss through theft, wastage and errors. But the figures reveal that more items go missing from actual shop floors in most other countries in Europe than from this sceptre’d isle, or indeed ‘aisle’. The research from the respected Centre for Retail Research in Nottingham reveals that almost 44 per cent of theft is carried out in UK stores with 36 per cent been stolen by staff. Around 4.5 per cent is taken by dishonest suppliers and 15.3 per cent is the result of internal errors.
This positions the UK 15th in the overall table of shoplifting countries that are ironically led by Euro 2004 champions Greece where 58 per cent of goods are stolen from stores. The UK has also been knocked off the top of employee theft tables as Poland, one of the new countries surveyed as part of EU enlargement, has seized the title with 38 per cent of its shrinkage down to staff dishonesty. Here, the UK recorded 36.4 per cent for staff pilfering, closely followed by Norway (34 per cent). But at 367, 621 arrests, the UK still apprehends more people for retail theft than any other country, although a lack of faith in the criminal justice system has led retailers to alternative means of theft prevention, as is the case across Europe.
In fact, all of Europe’s leading retailers are now winning their own private war on shoplifters by continuing to spend billions of euros on increased technology in their stores, according to the ERTB.
The ERTB, the fourth barometer conducted by the Centre for Retail Research (CRR), draws a direct correlation between the dramatic growth in security spending on tagging products at the point of manufacture, and the 2.2 per cent drop in the overall shrinkage, a continuing trend from 2003. It shows that more than half of those polled (57 per cent) are now using so-called ‘source tagging’ with a further 16 per cent who are in the early stages of implementing similar schemes across their stores. The report is a larger sample this year because it includes for the first time the findings from seven of the central European countries that have recently joined the EU as part of the enlargement process.
Report author Prof Joshua Bamfield also asked retailers about their plans for the implementation of Radio Frequency Identification (RFID) – the next generation technology that will reduce shrinkage and increase supply chain efficiency over the next decade. Both additions to the survey present interesting findings, argues Bamfield.
The survey of more than 400 major retailers in 24 countries put the cost of retail crime at 33 billion euros (£21 billion) in the year ending June 2004, the lowest recorded since the barometer was first published in 2000. Up until last year the crime rate was climbing, resulting in the increase peaking at 1.45 per cent of total turnover in 2002. But greater disillusionment with the effectiveness of the criminal justice systems around Europe and subsequent investment in in-store detection technology saw the figures begin to drop last year with shrinkage – loss through crime and wastage – continuing to fall to 1.34 per cent of turnover this year.
But retailers still need to tackle staff crime which bucked the trend, rising from 28 per cent last year to 29 per cent in 2004. Although customer theft represents the larger proportion of all shrinkage (48 per cent), employees in their trusted positions are able to steal goods of greater value. Customers last year stole _14 billion (£9.31 billion) worth of goods, but staff theft equated to almost _10 billion (£6.65 billion)
These figures are a starker reminder of the trend in dishonesty because shrinkage caused by wastage was also reduced to just 16 per cent, meaning that 84 per cent of loss was due to criminal activity.
The successful fight against shoplifters has been largely down to investment in new technology, according to the report. Security spending now stands at a record 7,207 million euros (£4,803m), an increase of 300 million euros (£199m) on the last barometer. The amount spent on security now equates to 23 per cent of the total cost of shrinkage across the 24 countries surveyed, equivalent to 15.62 euros per head (£10.30).
The last theft barometer reported an increase in technology spending, but now 57 per cent of retailers reported an increase in items EAS (Electronic Article Surveillance) tagged at the point of manufacture with a further 16 per cent in the early stages of source tagging.
With regard to RFID, the so-called ‘smart’ tags that are set to increase efficiency and reduce shrinkage throughout the supply chain, a total of nine per cent of the sample were holding evaluation trials which equates to around 120 retailers across Europe.
However, most retailers see RFID as a broader tool than simply one for reducing shrinkage. In fact, only four per cent viewed it as a ‘security only’ issue.
Almost 30 per cent of retailers said they expected to start trials within the next two years (before 2006) and a further 20 per cent would do so during the next three to five years. By 2009 more than half of the retailers sampled expect to have ‘made substantial progress within a significant proportion of the inventories.’
Consumer anxieties about privacy and RFID mean that retailers will seek their approval, but significantly only 12 per cent of the sample regarded customer reaction as ‘highly important’. Around 34 per cent said it was ‘quite important’ and 32 per cent attached ‘some importance’ to their views. A total of 64 per cent of retailers believed that customer fears would disappear when they know more about the technology. David Nuttall, managing director of Checkpoint Systems in the UK, says: "The report makes very interesting reading, especially as we have expanded the sample to include the newly enlarged European Union. There is a correlation between the investment in technology and RF source tagging made by retailers and the reduction in the problem of shop lifting across Europe. It is also significant that many retailers are investigating RFID/EPC technology, which will one day meet retailer’s multiple tracking, tracing security and identification needs. Today, RF-EAS technology continues to prove its value and it is encouraging to see that European retailers are preparing for the next stage, gaining experience with RF source tagging, a pre-requisite for the successful migration to RFID/EPC."
