Average shrinkage this year is 1.0 per cent of sales, compared to 1.1pc of sales last year, according to the fifth and latest Retail Fraud survey, by Retail Knowledge.
This level is still showing signs that the economy is recovering, at least in certain parts of the country, researchers suggest. Retailers are continuing to use their resources effectively; store fraud prevention costs as a percent of sales have decreased and average team sizes have reduced. Even in the face of these cuts shrinkage levels have dropped. The survey, whose results are available free to those taking part, is sponsored by WIS International.
In a foreword, Tim Edwards, Loss Prevention Director at JD Sports Plc, said: “If one thing has become very clear in fast changing retail environment, trying to fight the growing wave of organised crime whilst working only by yourself, in a vacuum, is never going to work. Collaboration is the key. Collaboration with other retailers (the growing number of forums is a clear example) with manufacturers and with researchers. Criminals exchange information at the speed of light – literally, with the internet. And to defeat the criminal we all need to pool our understanding, experience and resources.”
He added that criminals will go for the weakest link. For example, information obtained from one “soft” retailer can be used effectively against others to defraud even the most vigilant. “It is my view, that by not participating, those retailers are actually making it harder for us all to protect our businesses.”
The study is based on telephone and email research, carried out between January to March 2015, on the processes, systems and strategies used by UK retailers. The researchers carried out a detailed interview with the Loss Prevention director or manager for each company covered in the report, which covered high street and online retailing. Typically, the head of loss prevention focuses on stores and online shrinkage is managed separately. Employees, customers and fraudsters do not make this distinction and so shrinkage levels could be reduced by retailers who have a more holistic approach to profit protection across all sales channels. This is especially true with the growth of multi-channel retailing where transactions may cross organisational boundaries, the researchers pointed out.
Pictured is Paul Bessant of Retail Knowledge unveiled the findings on the morning of the annual spring Retail Fraud event in west London on April 23. More from the event in the June print issue of Professional Security magazine. The next event is at Leicester on October 8.
Picture courtesy of Retail Knowledge.
