Loss and Prevention Within Retail & Wider Industry

In 2023, retail businesses across the country forecast thefts would cost a staggering loss of £7.9 billion.

The overall monetary cost of crime, stands at £3.3 billion, up from £1.8 billion the previous year. This figure also includes the cost for crime prevention measures. Losses from customer theft reached it’s highest ever levels of £1.8 billion.

Accoring to the British Retail Consortium, Crime Survey Report 2024, there has been a surge in violence and abuse, up from almost 870 cases per day, to 1,300 cases. Incidents have increased in all locations – with 87% reporting a rise in inner cities and town centres; 65% in shopping centres; and 81% in retail parks and out of town shops.

With crime and incidents associates with this, at a 20 year high, it’s more imperative than ever retailers and business owners affected by loss ensure they have a robust end to end loss prevention strategy. This is not only to minimise the impact to profits but more importantly, to keep store colleagues and the wider workforce safe.

Elizabeth Harris (Ex Head of Loss Prevention & Tessiant Associate) has led the loss prevention strategy for one of the Big 4 Supermarkets and worked collaboratively with competitors across the industry, to knowledge share and problem solve. She shares insights on the framework for building a strong strategic plan.

3 MAJOR PILLARS OF LOSS:

• External Theft – Organised crime gangs are at the top end of this group, targeting high value products or invading properties for criminal gain. At the other end of the scale are individuals, where the retail industry has seen a real increase, predominatly because of the cost of living crisis. Key target areas tend to be logistics/warehouse sites where products are readily available and collaborations with suppliers can occur.
• Internal Theft – This is currently given the lowest level of focus, in most organisations. Many businesses are still grappling with how to tackle this issue, without impacting the culture of trust of employees. That said, it’s vital to identify the key areas of where internal theft is likely to occur.
• Theft and Loss from Process – An area where a business can have the most impact in reducing loss to their business. Unless all processes are scrutinised under a loss lens, there is real risk that loss will be an unitended consequence. Identifying key processes intrinsically linked to loss would be the low hanging fruit to target.

BBC Retail Crime Survey 2024. Covering the period from 1st Sept 2022 – 31st August 2023. Representing 1.1m employees and just under £2 billion market turnover.

Strategies Required to Reduce Loss:

Businesses require a strategy that identifies all groups that may target them and have a plan in place to address each one.

• Keep the strategy evolving. It’s critical that a simple and succinct way to record and report incidents is implemented. This will help ensure crime is reported correctly to the business and it understands what and where incidents are happening. This will allow tactical and strategic plans to be adjuested to support as necessary.
• Understand geographical differences. It you are a nationwide business, it’s improtant to understand the geographical areas most affected by loss and where to allocate more support. A clear reporting system can help achieve this. Retailers are reporting that organised gangs are playing a more prominent role in crime. CCTV has identified that criminal gangs can move around the country impacting the same business in multiple locations. However, it is also key to understand the solutions required to mitigate loss in different regions of the country.
• Robust stock take procedures. Results need to be reviewed and investigated where necessary. Plans and solutions to drive down losses can then be actioned.
• Waste should be recorded accurately at all times. Ensure products being transferred around the business are adjusted and charged to the correct departments.
• All processes should be reviewed with loss in mind. For example, if we introduce a new range of product in store, have we thought about what processes we need to protect it? How are we going to monitor it’s profitability to ensure the commercial strategy is supported?
• Collaborate with your competitors. They are all facing similar challenges and working together to form alliances will strengthen your strategy. Unfortunately a failure to report crime is once again increasing. A lack of belief that anything will be done be reporting incidents, is cited as one of the main reasons along with lack of staff time and difficulties with the reporting system.
• Retail crime is a community issue. Along with the police, collaboration with local communities, food banks, schools, councils and other local businesses affected, is essential. This will help your business to be kept informed of any known threats and is essential when it comes to looking deeper into the underlying causes of crime.

Further Strategies and Policies to Target Loss Prevention:

• Operational or capital investment to reduce loss. introducing measures to reduce and prevent loss in some areas, may require significant investment. Consider how investing in larger scale projects may continue to protect your profitability and employee safety. Some examples of these could be, self-scan checkouts, security cameras, security control centres to name a few.
• Review areas of the business handling cash. Whilst cash now only equates to around 20% of all transactions, the tendency is to assume that this type of theft is relatively low. However, from our experience this is an area which is exploited and a strong plan on cash handling procedures must be in place.
• Internal theft. This is a difficult topic to broach yet it must be a focus. For example back room ‘grazing’ where colleagues may eat of drink pduct which hasn’t been paid for. Organisations need to have a robust plan in place to understand the level of theft that is happening and address this as part of your overall strategy.
• Other approaches to prevent loss. This could include employing security guards, ensuring the appropriate level of product protection is applied or deploying technology to minimise the possibility of theft.
• Reporting incidents of theft or abuse. Although there has recently been some changes in the law to protect colleagues from abuse, only 8% of reported incidents of violence and abuse were prosecuted. It’s more important than ever for colleagues to be supported with industry leading training, so they understand their role and responsibilites in this challenging environment. They need to know how to keep themselves and other safe, should they find themselves facing difficult situations.

• Keeping customers engaged. Some interventions to reduce the impact of loss can initially feel restrictive to the customer and their in-store experience. Therefore, it’s critical to keep them informed about why and how you are protecting them, to minimise any negative impact. Take them on your journey and show that they are your most important relationship.

A Word About Tech:

We fully understand that the market is flooded with businesses trying to sell products to prevent loss. It can be extremely overwhelming working out where to invest for maximum gains.

From our deep industry knowledge, our expertise is in supporting you to work out the right strategy for you organisation. We have helped businesses of all sizes and beyond retail, to navigate their way through the huge array of products promising to minimise loss. We also have the industry contacts you will need to make the right decisions.

Summary

If you would like to talk about this in more detail or have a problem that you are having trouble resolving, we’d be happy to discuss this with you, to work towards a solution together. Please contact us to arrange an informal, confidential chat.