WHAT IS HAPPENING - Retail theft has reached $114.8 billion so far in 2009 according to the third annual edition of the “Global Retail Thefts Barometer” which measures the level of global retail theft. Last year’s total was $104.5 billion, this is 5.9% higher. A reduction of loss prevention by retailers is thought to be a large contributor to this increase. “Retailers attribute one third of the increase in shoplifting to the economic recession,” noted Professor Joshua Bamfield, Director of the Centre for Retail Research and author of the study. “Many have also noted a change in the type of offender and in the type of products stolen.”
WHAT DOES THIS MEAN TO YOU? A store operating at three percent profit on sales would have to sell $1,216.66 worth of merchandise a year to make up for the daily loss of a ten-cent candy bar. Just to cover a yearly loss of $1,000 in thefts, a retailer would have to sell each day over 900 candy bars, or 130 packs of cigarettes, or 380 cans of soup.
WHAT SHOULD YOU DO? Invest in an integrated retail theft system that will help control theft. Install video surveillance cameras and electronic article surveillance (EAS) devices attached to your products that will cause alarms to go off if not deactivated by the cashier.
http://www.globalretailtheftbarometer.com/pdf/Global-Retail-Theft-Barometer-2009.pdf
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The problem is that the retail theft systems do not always prevent theft. If you spend money on the retail theft systems and it doesn't work then you would be reducing your profit margin even more. Then you would be required to sell more candy bars, cigarettes, or cans of soup. I agree that these retail theft systems should be put to use but they have to figure out a way to ensure that these systems will work.
ReplyDeleteThis is very interesting to see that theft is increasing throughout the retail industry as a whole. With the economic recession it is easy to see why many of these businesses do not put more emphasis on ways to stop theft in their stores. One way to look at it is why spend the extra money on advanced security systems to stop these actions? Many companies do not invest as much money in these practices due to the items that are being taken. With many of the products the margin is so high that it's not worth the extra funds. For many of these products, the candy bar for example, the businesses are getting dirt cheap anyways. Say the business gets the candy bar for $.10, they then sell it for $1. So for every candy bar they sell they can lose 8 candy bars and still be $.10 above of cost. With margins this high it's not worth to spend the hefty cost of new security. Now of course with high price items that sell for $100 no one wants to lose and probably have a lower margin, so it might be worth the investment. To conclude my point is that with everybody short for money in this economy not all products are worth it to spend extra money on security and since these statistics are the retail industry as a whole some of these products might not be worth it to the businesses, which is why theft could be on the rise.
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