global retailers bear more and more losses from shoplifting

global retailers bear more and more losses from shoplifting


With prices continuing to rise, many large retail chains in the US and Europe are recording growing losses from shoplifting, both by individuals for personal use (shoplifting) and by organized groups for resale. In the United States alone, thefts cost retailers a total of $100 billion last year. In some countries, authorities, together with retailers, have already begun to take comprehensive measures to combat this phenomenon, which leads not only to losses for business, but also to an increase in crime and illegal circulation of goods.

We are losing them

At the end of May, the US National Retail Federation (NRF) released a special statementdedicated to the rise in retail crime. “Retailers are sounding the alarm about organized crime against retailers. This is increasingly damaging to the economy, jobs and the availability of goods,” notes NRF. According to her, more and more losses to the retail business are brought not only by ordinary shoplifters, but also by organized groups engaged in theft for subsequent resale.

“We all see it on the news. Every day you can turn on the TV and see a report about another theft at your local grocery store. None of this is news to retailers. But it is becoming clear that the frequency of such incidents is increasing. Fast. And all this has a bad effect on the consumers themselves,” says NRF.

The federation noted that in 2022 alone, shoplifting brought US retail industry total losses of about $100 billion.

NRF notes that retailers are increasingly reporting theft not only from the stores themselves, but also more complex theft of goods in transit from the warehouse to the store.

In an interview with a TV channel CNBC Travelers insurance spokesman Scott Cornell said his company saw a six-fold increase in shoplifting before it arrived last year. The most popular methods are the forgery of delivery documents and distributor IDs when transporting goods both from the manufacturer to the distributor, and during transportation from the distributor’s warehouse to the store.

In mid-April, the international company K2 Integrity, engaged in assessments and risk management, together with NRF presented the results researchdedicated to organized crime against retailers. It turned out that 15 of the 21 identified criminal communities emerged in 2021, that is, during the COVID-19 pandemic. It was recorded that in 45% of cases, stolen goods were sold on the Internet, including on such large sites as Facebook Marketplace (part of the Meta Platforms corporation, which is recognized as extremist in the Russian Federation and banned) and Craigslist.

In its first quarter report, retail chain Target warned, that at the end of the current year, shoplifting could bring her a loss of $ 500 million. Against the backdrop of a pandemic and lockdowns, analysts recorded a decrease in shoplifting: in 2020, the number of thefts decreased by 34% compared to 2019. However, as the lockdowns eased and against the background of accelerated inflation, thefts went up again and exceeded even the pre-pandemic level.

At the end of May in an interview Fox Business NRF Vice President David Johnston said: “From what we are now seeing and hearing from the leadership of many networks, I think that in 2023 the loss from theft will be even higher.” Jill Timm, chief financial officer of Kohl’s department store chain, said during a conference call with analysts that her company recorded an increase in theft losses in the first quarter. “We can take certain measures to at least contain the momentum. But we expect the difficult situation to continue in the near future.”

Also at the end of May, Foot Locker CEO Mary Dillon said thefts and takeaways were “adding to the company’s losses,” especially in the apparel segment. “Even taking into account the fact that such a problem has not appeared now, we see that the situation is becoming more complicated,” the top manager said. Walmart’s head of U.S. operations, John Ferner, said during the announcement of first-quarter results that the theft problem has begun to threaten the entire U.S. retail industry. “We intend to fight this seriously,” Mr. Ferner emphasized. “We will take reasonable measures that are necessary to protect our consumers, our partners and employees, to protect our goods.”

Global problem

Similar problems are observed not only in the United States, but also in Australia and Europe, including Russia. European retailers have already begun to crack down on the rise in shoplifting. They are hiring more security guards, putting in more surveillance cameras, putting more and more goods in protective boxes. Similar precautions are being taken by retailers in Germany. So, for example, in Berlin at the Lidl discounter chain, boxes with a special red “protected goods” sticker put packaged products such as a Norwegian salmon fillet for €9.99 or a Uruguayan beef steak for €6.99. “These goods are stolen more often than others. Theft went up when prices started to rise,” Lidl told Le Monde.

IN London Coop supermarkets have also begun to put in boxes even relatively inexpensive items, such as steaks worth £5.99 (€6.95). In addition to anti-vandal protection against burglary, such boxes are equipped with a GPS tag, which allows you to find it if the goods are taken out along with the box. “We were forced to start putting such products in boxes,” representatives of this network said in interview to the French newspaper Le Monde. — But that doesn’t really stop people. They take several boxes at once and run to the exit, it’s hard for us to prevent this.”

According to Polish police, in 2022, 32.7 thousand shopliftings were recorded in the country, which is 31% more than a year earlier. “Analyzing the data of the police departments of large cities, we can say that the record was shown in all of them, except for Lublin,” said the newspaper Rzeczpospolita, which analyzed police statistics in March. “The increase in the number of thefts has become an obvious sign of the problems that the market is experiencing: due to rising prices, more and more people decide on shoplifting,” Renata Yushkevich, president of the Polish Trade and Distribution Association, said in an interview with the newspaper. “Of course, this has become a major problem for stores, because their costs have risen markedly.

According to the manager British BP grocery store chain Tracy Clements, the problem with shoplifting in Britain, where inflation reached a record 11%, is more acute than in continental Europe. “Unfortunately, in the UK, shoplifting and other types of crimes against retailers are growing faster than in nine other countries in which I also work,” a British newspaper quotes a top manager. Independent.— This reminds me of the situation in 2007 when I worked for the Tesco Express chain (a chain of small neighborhood grocery stores.— “b”). Then the banking crisis led to a significant increase in shoplifting, as well as aggression and violence against store employees. Unfortunately, we are seeing the same thing now.”

According to Australian Media, local police recorded a record increase in cases of shoplifting in 2022 and early 2023. Last year, the number of thefts in New South Wales increased by 23.7%, the highest increase since 1995. In January of this year, the Queensland State Police recorded an absolute record of shoplifting. “We risk seeing this trend continue if unemployment continues to rise and the economy continues to deteriorate,” said Craig Woolford, a retail analyst at Australian research firm MST Marquee.

Dogs and technology guard goods

The shoplifting pandemic means that it is extremely difficult for retailers to solve this problem alone. In February, managers of a number of large stores and pharmacies in one of the districts of New York, tired of constant removals and thefts, hired to protect their stores private security guards with dogs. They began to guard the entrances to shops and pharmacies and in just one week prevented at least 25 thefts. Basically, these were cases when a thief with stolen goods tried to escape from a dog, but she quickly overtook him, and a guard arrived in time to detain the offender. There was also a case when two intruders, previously seen in thefts, saw a security guard with a dog at the entrance to the store and left without even daring to enter the trading floor.

However, experts are sure that a more systematic approach is needed, so market participants, together with relevant associations and authorities, are beginning to look for joint ways to solve the problem. Back in November, the US Congress accepted a special law aimed at strengthening the fight against trade in stolen and counterfeit goods, INFORM Act. This law requires marketplaces to check the information of sellers to make sure they are not selling stolen or counterfeit goods. If such sellers are identified, marketplaces must report this to the authorities and stop the sale of stolen goods on their sites.

At the beginning of June NRF organizes a special conference NRF Protect, during which market participants, industry associations and authorities will discuss how to protect the retail industry from an increase in shoplifting. Companies such as Walmart, Target, Lowe`s, American Eagle Outfitters, JCPenney, Macy`s, Albertsons will take part in it, Bloomingdale`s, Microsoft and others, as well as the Deputy Director of the Agency for Infrastructure and Cyber ​​Security in the US Department of Homeland Security, representatives of law firms. Market participants see increased control over marketplaces and identification of merchants of stolen goods as one of the ways to combat theft from stores, deactivation of stolen goods (mainly for electronics) after transferring information about theft from sellers / distributors to manufacturers of these goods, countering theft by replacing ID -cards and electronic waybills.

In mid-May, New York City Mayor Eric Adams introduced program to combat shoplifting, the number of which in the city increased by 44% last year. This program was developed by New York City Hall in cooperation with local retailers, police and experts. Among the measures of this program are strengthening the protection of stores, installing additional surveillance cameras, psychological preparation and training of store employees, preventive work with the population in problem areas of the city, targeted work with the poor and the homeless in the most crime-prone areas, installing special kiosks in stores where the homeless or poor people can seek help from the authorities, rather than steal products from this store, the rehabilitation program for those arrested for theft for the first time.

“This plan will help us develop a multi-pronged approach to addressing the problem of shoplifting,” said New York Mayor Eric Adams. “Work will be carried out not only to identify and punish criminals, but also to prevent crime, to train and train store personnel, fight against organized groups. “Public safety and community prosperity must go hand in hand, they are interdependent things,” said Kevin Kim, head of the City’s Small Business Administration, “This plan should send a clear message to small businesses that our administration will protect them so that small businesses continue to continued to contribute to the recovery of our economy.”

Evgeniy Khvostik



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