Survey depicts shrinkage trends

August 2003 News

A recent survey, conducted by the UK's Centre for Retail Research, found that shrinkage in 2001 cost Europe's retailers 28 900 million euro. A total of 15 European countries were included in the survey, the results of which were released earlier this year.

According to the survey, the most vulnerable items include branded goods that are heavily advertised, designer products, everyday luxury items with high resale value, and small, costly goods. In supermarkets, vulnerable items include food, alcohol, fresh meat, cosmetics and perfumes, tobacco, chocolate, videotapes, DVDs and CDs, clothing, tea and coffee.

In retail stores, the items most likely to be stolen are designer fashion and accessories, small electrical items, womenswear, gifts and toys, perfumes, health and beauty products, watches, and jewellery. "Unfortunately we have not conducted such a study in South Africa," says Neil O'Reilly, MD of Advanced Technologies. "However we believe that the trends are similar in this country, with the same articles being targeted." O'Reilly's affiliate company in the UK, provided an independent grant to fund the research for the European retail theft barometer.

A complete spectrum of retail industries was surveyed, including food stores, department and general stores, clothing outlets, electrical/video/music stores, hardware/DIY/furniture stores, shoe stores, and other non-food stores. "In South Africa, we estimate that annual inventory losses are about 2% of industry turnover," comments O'Reilly.

Professor Joshua Bamfield of the centre for retail research says that in Europe the culprits responsible for retail crime are customers (46%), employees (28%), suppliers (8%), and error (18%). The reasons behind shoplifting appear to be peer pressure, the need to stay in fashion, support a drug addiction, social fracturing, and failure of the justice system to deter offenders.

Research indicates that staff theft tends to be under-reported, that collusion with customers may be significant, and that staff may use company property for the 'social exchange process'. Furthermore, a shocking find was that many retail trends are conducive to theft. Features such as store layout, employing casuals, emphasising brands, and a service-oriented economy all help to encourage rather than deter theft.

The survey also found that those retailers who spent money on security did seem to have lower shrinkage. And their most important security product is electronic tagging with 65% saying it is 'reasonably' or 'very' effective.

A separate study conducted at the same time as the European retail theft barometer, looked at electronic tagging's market share within the European and global retail markets. There are three basic technologies in electronic tagging: radio frequency (RF), acousto-magnetic (AM), and electro-magnetic (EM). In Europe, department stores use predominantly RF (43%), followed by EM (30%) then AM (27%). Hypermarkets on the other hand use mostly EM (51%) while RF (50%) dominates in supermarkets. Shoe stores find RF (62%) most helpful, as do music/electrical stores (45%) and DIY/hardware stores (53%) while bookstores tend to use EM (54%) over RF (46%).

"In South Africa, radio frequency has taken off, and is following similar trends to those in Europe," explains O'Reilly.

For more information contact Pieter van Rensburg, Advanced Technologies, 011 450 2851, pieter@checkpointes.com





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