Theft to cost retailers £7.9bn in 2023, study finds

It has been forecast that retail theft will cost UK retailers £7.9bn this year, according to new research by Thruvision Group plc and Retail Economics. Thruvision, a provider of walk-through security technology, and Retail Economics stated that shoppers account for 60% of the value of the theft (£4.7bn) while employees, working in distribution centres (DCs), distribution and stores, account for 40% (£3.2bn). Theft in DCs is the employee crime that is under-reported by retailers with some 42.6% (£1.4bn) of the total employee theft from DCs. Meanwhile, around two thirds of retailers interviewed believe that over the past decade the opportunity for crime in DCs has accelerated. Two thirds of the respondents stated that financial pressures resulting from the cost-of-living-crisis, has to some degree, driven an increase in theft by employees at DCs over the past year. According to the report, a quarter (26.4%) believe the type of products being stolen in DCs has changed over the past year, shifting towards smaller items and valuable electrical products that are easy to resell. There has also been a shift towards essentials such as groceries and clothes, as the recent economic backdrop, high inflation and rising interest rates contributes to growing crime. In addition, there are also structural shifts in the labour market impacting crime, with half (50.9%) of retailers considering a reliance on temporary staff as a key driver of theft. Retailers grappling with current vacancies rely on a transient workforce. Although minimum wages have increased in recent years, there is a perception of declining job satisfaction as the intensity of work changes and greater sickness in the labour force impacts full-time work. Among those that have seen an increase in employee theft over the past year, 70% state they've seen an increase in organised crime in DCs. Colin Evans, chief executive of Thruvision, said: "That employee theft is a rapidly growing problem is not a surprise, but the scale of financial losses suffered by UK retailers in their distribution centres really is. What is even more surprising is that so few retailers seem to be prepared to deal with this very serious problem when proven technology solutions exist - only one in six retailers are investing in detection and deterrence technology to solve Distribution Centre theft. "Our fast, effective and employee-friendly security technology is used to quickly check many thousands of loyal and hard-working staff every day in DCs across the UK, and is proven to deter criminals, petty and organised, from stealing from their employers. Many well-known high-street retailers have demonstrated how our technology has a return on investment of six months or less." Richard Lim, CEO of Retail Economics, added: "Retail crime adds to a backdrop of rising operating costs that have squeezed profitability in recent years. A startling 40% of theft stems from a minority of retail employees. The nature of theft becoming more organised demands a widespread and holistic approach incorporating deterrence, detection, and industry-wide collaboration. "Proactive measures not only curb the impact of theft, but also cultivate a safer environment, attracting talent and fortifying the industry. Striking a balance between fairness among honest employees and deterrence is now pivotal as structural shifts leave retailers vulnerable to disconnected workforce and supply chain complexity."