Consumers are continuing to steal from retailers at a staggering rate, with a study showing retail theft increased with 5.6 per cent to $2.75 billion in Australia in the past 12 months, with apparel, cosmetics and hardware the most stolen items.
Mark Gentle, managing director of Checkpoint Systems said that Australian consumers and businesses alike have been affected by the economic downturn, so has investment in security strategies to guard against theft and loss been reduced, leaving the doors wide open for a new kind of thief – mums, white collar professionals and older people rather than the opportunistic thieves of the last five years.
This increase in theft has meant that the costs of shrinkage to the retailer bottom line is being passed onto Australian households, that are being charged an additional $280 in ‘honesty tax’ to help retailers to cover the costs of shrinkage.
However, according to the third annual Global Retail Theft Barometer (GRTB) the level of investment in loss prevention technology was down 12 per cent on last year.
Gentle said that while retailers have had to cut budgets in most areas, this year’s study shows the adverse effect of cutting spending too deeply in the area of loss prevention.
"The Global Retail Theft Barometer demonstrates that there is a direct correlation between investment in loss prevention and retail shrinkage. Prudent spending in this area can have a very positive effect on bottom-line numbers.
"The increase in theft in the apparel, cosmetics and hardware areas demonstrate that there is a need for more sophisticated security in-store. Australia has the most open merchandising format in Asia Pacific which is very attractive to both new and traditional offenders," he said.
The research shows that only 53 per cent of the planned increased spending on crime prevention hardware and software were actually realised.
“The 2009 study also found that globally, retailers decreased their spending on loss prevention and security by $1.123 billion, no doubt in response to their general need to trim budgets in tough times,” said Professor Joshua Bamfield, director of the Centre for Retail Research and author of the study.
“However, the correlation between $900 million in decreased security spending and a $12.42 billion increase in theft is very significant. It highlights the importance of continued advancement and improvement of loss prevention programs, as reducing theft is key to the success and growth of retailers’ businesses,” he said.
Loss prevention spending in 2009 for Australia was equivalent to an average of 0.35 per cent of retail sales, compared to a global average of 0.31 per cent.
Retailers attribute one third of the increase in shoplifting to the global financial crisis (GFC) and many have also noted a change in the type of offender and the type of products stolen.
“There is criminological evidence that crime rises as economic conditions worsen and there are indications that crime is now a much more important issue for retailers than two or three years ago when many thieves were opportunistic youngsters,” said criminologist Dennis Challinger, Honorary Fellow at the University of Melbourne.
“Now we are seeing mothers, white collar professionals, and older Australians stealing from shops, and organised thieves are becoming more prevalent. Some shop thieves may be facing real hardship. People whose family income has fallen because of unemployment or reduced working hours may feel forced to steal in order to maintain their previous lifestyle."
The Checkpoint Systems study monitored the costs of shrinkage and crime in the global retail industry between July 2008 and June 2009, confirming that the level of global retail theft reached $143.32 billion in 2009, representing a significant increase of 5.9 per cent or approximately $12.86 billion.