UK retailers suffer most from shrinkage
New report reveals UK retailers lose more than £10bn every year to shrinkage
20 June 2019 – A new report released today reveals that 1,000-plus daily incidents of shoplifting, food waste and soaring internal theft are costing UK retailers almost £11bn annually – the highest of any country in Europe.
According to the ‘Retail Security in Europe. Going beyond Shrinkage’ report, conducted by Crime&tech with the support of Checkpoint Systems, the global leader in source to shopper solutions, shrinkage cost retailers £10.96bn annually in 2017. The value includes external and internal theft, but also administrative errors, non-compliant use, waste, expired goods and damaged cold items and goods.
Stores were found to be spending a total of £3.09bn on measures to prevent losses, while the study found that shrinkage costs the UK retail industry £7.86bn.
The cost of shrinkage
UK retailers in the grocery sector are the hardest hit by shrinkage, costing £4.4bn, followed by department stores (£2.1bn per year) and apparel retailers (£783m per year).
Demonstrating the most at-risk products favoured by shoplifters in Europe, researchers also revealed the top five stolen items by value in food retail: alcoholic drinks, cheese, meat, sweets and canned fish. Meanwhile in apparel, accessories, knitwear, trousers and blouses were the most attractive items, with mobile phones and accessories topping the list in electronics and high-value tools in DIY stores respectively.
Shrinkage: the fourth largest retailer in Europe
With feedback from retailers in 11 countries*, the report reveals that total losses to shrinkage, when compared to total company turnover, would represent the fourth largest retailer in Europe.
Among the main findings the report also revealed:
- The most common criminal causes of shrinkage in the UK is shoplifting, followed by robberies and burglaries
- Half of UK retailers surveyed thought shoplifting was increasing while 17% said it was decreasing and 33% believed the rate was stable
- UK shoplifters most frequently use the ‘grab and run’ method
Mike French, Business Unit Director of Checkpoint Systems UK said:
“Shrinkage in the UK is the highest of any country in Europe and retailers need to take urgent action to reduce this if they are to remain competitive and profitable.
“Checkpoint has a long history of providing insightful research into retail loss, having sponsored and published several respected reports over the last 16 years. The new Retail Security in Europe study will help retailers to assess and define their own loss prevention strategies while reducing theft and improving the customer experience.
“As we mark our 50th anniversary this year, we understand that this is more important than ever. The fact that shrinkage, if converted to turnover, would represent the fourth largest retailer in Europe should not be taken lightly. It’s extremely worrying that the actions of the few can financially impact businesses and employees. In light of today’s tough retail climate, it’s more important than ever for retailers to take note of the findings and take the necessary actions to reduce their losses.”
Speaking about the report Prof. Ernesto Savona, Director of Crime&tech, added:
“The research reveals that retailers across Europe are using a mixture of techniques to measure shrinkage, which include a variety of both crime and non-criminal losses. All these different approaches shall be kept in mind when interpreting the results presented. For this reason, the study goes beyond shrinkage, and it analyses retailers’ inventory policies and technologies, the contextual factors that have an impact on retail losses, the modus operandi of shoplifters, and how countermeasures and security solutions are adopted and combined together.”
Interested parties can obtain a copy of the complete 133-page Retail Security in Europe: Going beyond Shrinkage report at http://www.retailsecurityineurope.com/ or https://www.crimetech.it/landing/retail-security-in-europe/
Notes to Editors
*Participating countries include Belgium, Finland, France, Germany, Italy, Netherlands, Poland, Russia, Spain, Sweden and United Kingdom
- Shrinkage can be estimated at €8.9 billion per year, while expenditure in security measures at €3.5 billion. By combining the two figures, the total cost attributable to retail losses in the UK is equivalent to almost €12.4 billion per year (around 190 euro per capita per year).
- UK retailers recorded, on average, a shrinkage rate equivalent to 1.1% of their turnover including both known and unknown shrinkage.
- Shoplifting is the most frequent cause of shrinkage, followed by robberies and burglaries. Shoplifting is also the only type of external theft which, according to half of respondents, is increasing, while for all interviewed retailers both robberies and burglaries are mostly decreasing. This trend is confirmed by data on crimes recorded by police.
- The highest number of shoplifting incidents was recorded in the Bristol/Bath, Leicestershire and Inner London (West) areas. The highest variation between 2016 and 2017 was observed in Bristol/Bath, followed by Leicestershire and West Yorkshire. Grab and run, booster bags and removal of tags are the most frequent modus operandi of shoplifting.
- The highest number of retail crime news reports referenced the grocery retail sector
- Among profiles of shoplifters, together with micro-gangs of 2-3 persons, UK retailers also highlighted individuals – sometimes customers who become thieves by frustration or opportunity – especially in the presence of self-scan and self-checkout services.
The study adopts an innovative methodology including a survey on retailers equivalent to about 24,000 stores, data on shrinkage at store level for about 3,500 stores (largest dataset of this kind ever analysed), analysis of 1,600 news stories on retail crime, a focus group and bilateral interviews with more than 50 security managers.
About Crime&tech (www.crimetech.it)
Crime&tech Srl is the spin-off company Università Cattolica del Sacro Cuore - Transcrime. Crime&tech translates Transcrime’s research into technology and applications for private sector and public institutions, by offering advanced analyses to assess, monitor, map and prevent security and crime risks.
About Checkpoint Systems, Inc. (www.checkpointsystems.com)
A division of CCL Industries, Checkpoint Systems is the only vertically integrated RF/RFID solution provider for retail. With consumer demands accelerating at an extraordinary rate driven by technology, Checkpoint delivers intelligent solutions – bringing clarity and efficiency into the retail environment anytime, anywhere. Through a unique offering of software, hardware, labels, tags and connected cloud-based solutions, Checkpoint optimizes retail operations and efficiencies with real-time intuitive data delivered throughout the supply chain and in-store resulting in improved profitability and an enriched consumer experience. Checkpoint's intelligent retail solutions are built upon 50 years of radio frequency technology expertise, innovative high-theft and loss prevention solutions, market-leading software, RFID hardware and comprehensive labeling capabilities to brand, secure and track merchandise from source to shelf.
About CCL Industries
CCL Industries Inc., a world leader in specialty label and packaging solutions for global corporations, small businesses and consumers, employs approximately 19,000 people and operates 150 facilities in 25 countries on six continents with corporate offices in Toronto, Canada, and Framingham, Massachusetts. For more information, visit www.cclind.com.
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 A spin-off of the Università Cattolica del Sacro Cuore – Transcrime
Checkpoint Systems, a division of CCL Industries, addresses two critical issues for its customers: Improving Profitability and Improving Consumer experience. With consumer demands accelerating at an extraordinary rate driven by technology, Checkpoint recognizes the challenges faced by its customers in the rapidly evolving retail market. We deliver intelligent solutions – bringing clarity and efficiency into the retail environment anytime, anywhere. Through a unique offering of software, hardware, labels, tags and connected cloud based solutions, Checkpoint optimizes operational efficiencies through analysis of real time data captured throughout the Supply Chain and in store then translating this to clear concise actions and tasks.
We provide end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper’s experience. Checkpoint’s solutions are built upon 48 years of radio frequency technology expertise, innovative high-theft and loss-prevention solutions, market-leading RFID hardware, RFID software, and comprehensive labeling capabilities, to brand, secure and track merchandise from source to shelf. Checkpoint’s customers benefit from increased sales and profits by implementing merchandise availability solutions, to ensure the right merchandise is available at the right place and time when consumers are ready to buy. Checkpoint operates in every major geographic market and employs 4,500 people worldwide.