The UK’s top retailers view creating a “positive staff attitude” towards loss prevention as their number one priority in the battle against rising shrinkage, according to a leading piece of research.
The Retail Fraud Study, run by industry expert Retail Knowledge in association with retail solution provider Volumatic and RGIS, found that retailers view creating an intrinsic culture of loss prevention in their organisations as key in tackling their losses of £3.4bn due to theft and fraud.
The study worked directly with 100 of the UK’s top retailers, including Tesco, John Lewis and Marks & Spencer, accounting for 42% of the total UK retail space and took 600 hours to complete.
Paul Bessant, managing director at Retail Knowledge, said: “Last year retailer’s losses due to criminal activity nearly matched pre-tax profits as a percentage of sales of which nearly a fifth was attributed to their own staff.
“However on the flipside 40% of all criminal activity in stores was reported by honest employees and this has made retailers realise that their staff can play a critical role in reducing losses. As a result retailers are starting to promote a healthy attitude within their organisations, to create a positive culture of loss prevention amongst staff, and prioritising a comprehensive approach to reducing losses.”
60% of retailers believed creating a culture of loss prevention could reduce their losses with 20% making it their number one priority. Many of those who identified creating a culture of loss prevention as a priority said that staff training programmes to raise awareness of issues across the business as one of the best methods of reducing shrinkage.
Bessant said: “What became clear is that loss prevention executives are trying to expand their influence across the business by changing employee culture and increasing the reach of loss prevention within their organisations. This is recognising that a comprehensive approach to reducing shrinkage would be more effective than the fragmented systems that are currently in place.
“It is safe to say that many loss prevention executives have woken up to the fact that in the current tough economic climate – an environment which has historically always increased the volume of criminal activity – they have to take a more pro-active stance to reduce losses.”
Whilst training and increasing awareness of shrinkage across the retail sector is one option in creating a culture of loss prevention, 12% of retailers identified technology as an alternative to training in order to create a positive culture across their business.
Source: Retail Knowledge