The loss world - Fri, 12/12/2008 - 5:14pm

The UK is the crime capital of Europe as retail theft soars to £4.1 billion, according to the Global Retail Theft Barometer

The UK is the retail crime capital of Europe according to the Global Retail Theft Barometer published by the Centre for Retail Research.

In the last year, retail crime topped £4.1 billion, highlighting the hidden impact that the credit crunch is having on the high street. This means that the UK is officially the worst nation in Europe for shoplifting and third in the world behind the USA and Japan.

The Barometer - the largest report of its kind in the world and writtenm by Professor Joshua Bamfield - surveying 920 of the leading international retailers - retail theft or ‘shrinkage' (stock loss from crime and wastage) has posed a serious problem for the UK over the last 12 months, with £4 billion worth of stock going missing during this period alone. Despite this declining slightly in the last year to represent 1.3% of sales turnover, the UK still boasts higher than European-average shrinkage levels (1.27%). This is bad news for hard-pressed consumers who end up bearing the brunt of this ‘social scourge', which is the equivalent of criminals taxing every household in Britain by approximately £189 a year.

As economic doom and gloom casts a dark shadow across the country and disposable income reaches an all-time low, it comes as no surprise that light-fingered customers and employees have been looking to unlawful means in a bid to get their hands on the most desirable goods. While in the UK, external theft - made-up of opportunistic shoplifters and organised gangs - accounted for 42.6% of total shrinkage, most worrying, was the amount lost through employee theft. After Ireland, the UK ranks as the worst in Western Europe for theft by dishonest members of staff, with 34% of all shrinkage originating from within.

The largest source of loss generated by fraudulent employees across Europe was merchandise theft, costing £2 billion and accounting for 30.4% of all internal fraud. Cash, coupons and vouchers represented the second most stolen items, costing retailers £1.8 billion and making up 27.2% of total internal fraud. Refund fraud and false price markdowns, the third largest source, cost retailers £1.5 billion whilst collusion and large financial frauds came in at £825 million and £543 million respectively.

Against the backdrop of a troubled economy and with margins squeezed ever-tighter, loss from theft has been a tough cross to bear for retailers' financial performance. This is not surprising given that across Europe, retailers have reduced spend on security and loss prevention this year by 4.9% compared to 2007. Nevertheless, £5.5 billion was invested in security and loss prevention by European retailers, equivalent to 0.34% of total retail sales in the year to June 2008. Of this, the amount spent by UK retailers on security measures came to £838 million, third only behind France and Germany.

This year, off licences and liquor stores were the biggest losers in the fight against retail crime with shrinkage as a percentage of turnover increasing by 6.3%. Increases were also reported by electrical goods and computer retailers (3.6%), discounters / cash and carry stores (2.6%), hardware / DIY merchants (2.3%) and department stores (2.1%). Meanwhile, it has been good news for the supermarkets, jewellers and footwear / sports retailers, all of whom have successfully achieved a decrease in shrinkage levels by 5.0%, 4.1%, 3.0% respectively.

Expensive, branded products that are in high-demand are top of thieves shopping lists this year according to the Global Retail Theft Barometer, commissioned by Checkpoint Systems. The most frequently stolen products, in order, are alcohol (specifically whisky, vodka and champagne), cosmetics and skincare, womenswear, perfumes and fine fragrances, razor blades, DVDs and games, childrenswear, accessories, designer wear, high-cost and speciality meat and fish, including fresh meat, ham and seafood and cheese.

"In the current economic climate, retailers can't afford to be blasé about security," commented Neil Matthews, Vice-President of Checkpoint Systems NCE. "Inevitably, the worse off people are, the more likely they are to turn to crime. It's not rocket science, but it is essential that retailers have the right controls in place to ease a pressure that is only likely to get worse as we go into 2009. We're already witnessing the effects of budget reductions and the social and business implications are huge.

For further information about the Global Retail Theft Barometer please visit
www.globalretailtheftbarometer.com.