Close to two-thirds of food retailers in the UK and US believe that the impact of theft has reached a crisis point, according to a new study.
The research, commissioned by Avery Dennison, included 300 senior retail leaders in the UK and the US, representing brands with more than 200 stores.
Nearly four in ten (38%) participants were of the view that theft is more of a concern today than it was twelve months ago.
Theft emerged as the leading business concern among food retailers, with 35% saying that addressing the impact of theft is their top business challenge.
Other challenges cited by the participants include optimising omnichannel (27%), improving staff efficiencies (27%), minimising supply chain disruptions (26%), and addressing talent shortages (24%).
Addressing Challenges
Food retailers are responding to these challenges with a combination of anti-theft and loss prevention measures, the study noted.
More than half (55%) of retailers have allocated 3% to 4% of their total IT budget to retail theft detection and prevention.
For 50% of the retail leaders surveyed, these budgets equate to an increase in spend over the last two years, data showed. However, over a quarter (27%) still believe the resources allocated are insufficient.
Retailers have also deployed various technology-based measures, such as RFID tags, body cameras, and facial recognition technology, to tackle an increase in theft, in addition to security guards.
Respondents listed facial recognition technology (26.3%) as the most effective, followed by security guards (25.7%), license plate recognition technology (25.7%) and RFID tags (21.6%).
More than three-fourths (77%) of food retailers have either deployed RFID tags or plan to do so in the next 24 months.
Forty-two percent of food retailers plan to deploy AI enabled cameras, while 36% will introduce facial recognition technology within the same period.
Substantial Impact
Francisco Melo, president of Solutions Group at Avery Dennison, stated, “While theft remains a significant concern, shrinkage extends further to include supply chain waste, misplaced inventory, human error, and even fraud. The impact is substantial.
“To protect profits and create safer store environments, it is imperative that retailers take a data-led approach to security. Leveraging advanced track and trace technologies such as RFID, with real-time analytics, will help to turn loss prevention into a proactive operation rather than a reactive one.”
