Fashion and department stores among biggest retail shrinkage sufferers in UK

By

Sandra Halliday

Published
Jun 21, 2019

Retail shrinkage, the stock lost to theft, fraud, errors or damage, is costing UK retailers almost £11bn annually – the highest figure of any country in Europe, a new report shows.

The report, looking at 11 countries including Belgium, Finland, France, Germany, Italy, the Netherlands, Poland, Russia, Spain, and Sweden, showed that shrinkage, swallows up a total of 2.1% of retail sector turnover across all the countries, adding up to £43.6 billion.

And while the grocery sector is the biggest sufferer, department store and specialist fashion shops come next, the former losing £2.1 billion and the latter £783 million a year in the UK. In total, the shrinkage rate for apparel retailers across Europe was 1.4% of turnover with accessories, knitwear, trousers and blouses “the most attractive items to steal.”

The Retail Security in Europe. Going beyond Shrinkage report was conducted by Crime&tech with the support of Checkpoint Systems and is based on deep analysis of figures from 2017 plus insights from last year. It surveyed retailers equivalent to about 24,000 stores, and took data on shrinkage at store level for about 3,500 stores, saying it’s the largest dataset of this kind ever analysed. The study also took in analysis of 1,600 news stories on retail crime, a focus group and bilateral interviews with more than 50 security managers.

We’re told that shoplifting is the biggest problem for UK stores and that retailers in Britain suffered 1,000-plus daily incidents of shoplifting in 2018. Half of UK retailers surveyed think shoplifting is increasing.

But the financial losses to stores aren’t only about stolen or damaged items as companies are having to spend part of their turnover on preventive measures. The researchers came up with the almost-£11 billion figure as companies are spending a total of £3.09bn on measures to prevent losses of around £7.86bn every year. 

Mike French, Business Unit Director of Checkpoint Systems UK said: “Shrinkage in the UK is the highest of any country in Europe, and despite high levels of investment in anti-shrinkage measures across the continent, factors such as non-compliance and obsolete technology [are] causing unsustainable levels of retail shrinkage. Retailers need to take urgent action to reduce this if they are to remain competitive and profitable.”