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New research published this morning has forecast that the value of retail theft will reach £7.9bn this year amid an increased targeting of the industry.
New research by security technology group Thruvision and Retail Economics shows that UK retailers are under growing pressure from theft from both customers and across distribution centres.
The research forecasts the value of retail theft will be £7.9bn in 2023. Shoppers account for 60% of the value of theft (£4.7bn), while employees working in DCs, distribution and stores account for 40% (£3.2bn).
Theft in DCs, it said, is a current hot spot for employee crime that is under-reported by retailers – some 42.6% of total employee theft is from DCs.
Around two-thirds of retailers interviewed believe that over the past decade the opportunity for crime in DCs has accelerated. 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.
Among a survey of 100 managers and directors responsible for loss prevention at large UK retailers, a net balance of a fifth (20.9%) has seen an increase in employee theft over the past year.
Two-thirds of respondents believe financial pressure as a result of the cost-of-living crisis has driven an increase in theft by employees at DCs over the past year to some degree.
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. Additionally, there has been a shift towards essentials such as groceries and clothes, as the recent economic backdrop bringing high inflation and rising interest rates contributes to growing crime.
The step up in theft is particularly impacting food retailers. A net balance of a third (33.4%) of food retailers are suffering an increase in theft, with one East Midlands-based grocer (£300m+ turnover) seeing a rise in “all types of food” being stolen over the past year.
But there are 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 current vacancies rely on a transient workforce.
Among retailers that have seen an increase in employee theft over the past year, 70% state they’ve seen an increase in organised crime in DCs, exploiting the labour shifts, which leaves retailers more exposed to widespread theft at scale.
It comes as 55.5% of retailers do not routinely attempt to prosecute employees who steal from DCs.
Among reasons why retailers do not pursue prosecution, more than half (55.7%) believe “police do not take theft seriously enough”, which is leading to more than a third (37.6%) to take matters in their own hands, prioritising internal disciplinary over legal prosecution.
This results in crimes going unrecorded, making it easier for businesses to unknowingly hire criminals, which has the potential to perpetuate theft across retail.
Richard Lim, CEO of Retail Economics, says: “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.”
Morning update
Speciality agriculture and engineering group Carr’s Group has announced a number of leadership changes will take place this week.
CFO David White will step up to succeed outgoing CEO Peter Page, who will leave the company on 17 November 2023 having completed an orderly handover.
White, who joined the Company in January 2023, is “ideally placed to lead the delivery of the next phase of the group’s strategic plan, given his previous experience in international senior leadership, operations and finance roles at Aggreko”.
Gavin Manson has been appointed CFO with effect from 13 November 2023. He has previously held a number of executive and non-executive roles across both public and private companies, including CFO and COO of Electra Private Equity and group finance director of Premier Farnell.
Martin Rowland, who was appointed to the board as non-executive director in March 2023 pursuant to the ‘relationship agreement’ the company struck with Harwood Capital Management Limited, will be appointed executive director of transformation with effect from 13 November 2023.
The group intends to announce its results for the year ended 2 September 2023, including an update on the execution of the group’s strategy, in December.
Tim Jones, Non-executive Chair, commented: “I look forward to working with David, Gavin and Martin to optimise the Group’s existing businesses, implement our strategy and deliver shareholder value. I would like to thank Peter for his commitment to the Company over his tenure and wish him all the best in his future endeavours.”
On the markets this morning, the FTSE 100 has started the week up 0.7% to 7,411.6pts.
Early risers include McBride, up 4.6% to 49.9p, Naked Wines, up 3.6% to 29.7p and Marks & Spencer, up 1.6% to 250.4p.
Fallers include Hotel Chocolat, down 1.1% to 134p, Ocado, down 1.1% to 509p and Greencore, down 0.6% to 92p.
This week in the City
After a busy few weeks the rate of market updates slows this week.
Highlights include Diageo holding a capital markets day after its shock profits warning on Friday.
Imperial Brands will post its full year earnings tomorrow, while Premier Foods will issue its first half results on Thursday and Finsbury Food Group holds its AGM.
Away from company news, tomorrow will see the publication of the monthly Nielsen grocery sales figures, while the ONS Retail Sales figures for October are published on Friday.
Internationally, Walmart posts its Q3 numbers on Thursday and Weetabix owner Post Holdings will release its Q4 earnings on Friday.
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