Theft is expected to cost UK retailers as much as £7.9 billion in 2023, according to new research provided by walkthrough security technology company Thruvision Group PLC (AIM:THRU, OTC:DIGTF) in partnership with Retail Economics.
Although high-street theft has been something of a moral panic this year, the data suggest that employee theft accounts for up to 40% of total shrinkage.
Of that 40% of employee theft, 42.6% originates from theft at retailers’ distribution centres (DCs). Theft in DCs is a current hot spot for employee crime that is under-reported by retailers.
Around two-thirds of retailers interviewed believe that over the past decade, the opportunity for crime in DCs has accelerated.
Among those that have seen an increase in employee theft over the past year, 70% state they’ve seen an increase in organised crime in these warehouses.
The majority of respondents in the research believes that the cost-of-living crisis has partially driven an increase in employee theft.
This is reflected in the changing nature of stolen goods, with a noticeable shift towards essentials such as groceries and clothes alongside smaller items and valuable electrical products “that are easy to resell”.
The step up in theft is particularly impacting food retailers.
More than a third of polled food retailers are suffering an increase in theft, with one East Midlands-based grocer noting a rise in “all types of food” being stolen over the past year.
Half of retailers said they “do not routinely attempt to prosecute employees that steal from DCs”, mainly because “police do not take theft seriously enough”.
48.1% of polled loss-prevention managers cited financial stress from the cost-of-living crisis as the “main driver” of employee theft.
A Statista report revealed that “while wages are currently growing at a relatively fast pace, high inflation is currently cancelling this growth out, leading to the negative growth in real terms throughout 2022 and early 2023”.
Data provided by the Office of National Statistics (ONS) indicates that the real-term growth in total pay saw a decline of 2.0% in the first quarter of 2023, and regular pay experienced a decrease of 1.3% during the same period.
Wages have since improved.
During the three-month period leading up to August 2023, the average weekly earnings in the UK, including total pay, increased by 8.1%, and earnings excluding bonuses rose by 7.8% compared to the same time in 2022.
Inflation in August had fallen to 6.7%, with this level maintained in September.