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Retail

Shrinkage Cost UK Retailers Over £2.34 Billion Last Year

UK retailers lost £2.34 billion to shrinkage in just 12 months, according to the newly-released UK Retail Fraud Survey 2016.

Employee theft was identified as the single biggest cause, with 68 per cent of retailers citing it as their top area of loss.

Shrinkage rates vary by retail sector from the big retailers and department stores at 2.68 per cent of sales to a low of 0.25 per cent of sales for hospitality and leisure retailers. However, mass merchants and department stores have seen a massive increase in shrinkage rates since last year of 58 per cent whereas hospitality and leisure retailers have seen a decrease of 38 per cent.

Paul Bessant of Retail Knowledge said: “Over the past few years the retail landscape has changed beyond all recognition, and with it, so has loss prevention. The nature of threats with which the department is now expected to deal has changed too".

With the redrawing of the lines of risk comes increased responsibilities for those who traditionally confined themselves to a narrower loss prevention function, as well as greater opportunity to support and contribute to the business.

"The signs are that these new approaches are working well."

Steve Simmonds of WIS International, added: “The survey provides a unique insight into what issues are emerging in the world of retail risk and loss prevention and allows retailers to both benchmark their own performances as well as prioritise areas where others are already being challenged and they may well be too."

It also allows those who supply solutions to the risk and loss prevention market to "better understand where challenges are being posed", and to help produce solutions "most relevant" to a constantly evolving market place, he concluded.

Published by Retail Knowledge and sponsored by WIS International, the survey reports on the systems, processes and strategies of the UK retailers.

The Survey covers retail transactions accounting for some 32 per cent of all UK retail sales online and offline through 34,950 stores across the UK.

© 2016 European Supermarket Magazine – your source for the latest retail news. To subscribe to ESM: The European Supermarket Magazine, click here.

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