Damage limitation

Criminals are increasingly targeting shops, with police priorities elsewhere and soft penalties failing to provide any kind of meaningful deterrent. Haven’t we been here before? Well, in terms of the British Retail Consortium’s (BRC) annual Retail Crime Survey, indeed we have (‘Counting the cost’, SMT, December 2005). Unfortunately, we have also seen similarly damning results in this year’s study.

Sponsored once again by ADT, the 2005-2006 Survey is the thirteenth to be undertaken, based on detailed data drawn from 10,054 retail outlets nationwide with a combined turnover of £110 billion. Those who responded account for 45% of total UK retail sales.

The results show that crime cost retailers £2.10 billion in the past year, and a massive £13.26 billion since 2000. Crucially, over the same period the number of shop thefts rose by an alarming 70% even though the industry has invested upwards of £4.3 billion in crime prevention. There’s a snowball effect here, too, because when the number of shop thefts increases so too does the threat of violence against staff. No less than 60% of violent attacks in stores occur when members of staff attempt to detain criminals or protect goods from being stolen.

In the wake of these findings, the BRC is understandably calling on the Government to reject proposals that would see prison removed as a penalty for shop theft, even for the very worst repeat offenders. Quite rightly, the BRC also feels that the police service should make retail crime a higher priority.

As we stated in our review of last year’s Retail Crime Survey, this is not a victimless form of crime. It has both serious human and financial costs attached to it, and these cannot be ignored. The Government’s failure to provide enough prison capacity should not be used as an excuse for treating retail crime as a trivial matter. It is far from being that.

Many of the concerns and recommendations contained in last year’s Retail Crime Survey remain relevant. Although BRC director general Kevin Hawkins is more determined than ever to work with the Home Office and the police service to reduce crime against retailers, he duly acknowledges the fact that much police time is now taken up with the ongoing battle against terrorism.

“There have also been several changes of ministers and senior officials at the Home Office,” asserts Hawkins, “forcing ministers to look inwards at their own structures and performance. The resulting loss of momentum in policy development for business crime means that the issues and challenges we articulated last year remain relevant today.”

The multinational retailers

Since the start of the decade, retailers have incurred losses of over £9 billion from crime, with an average of £1.51 billion being lost each year. In 2005, the industry lost a total of £1.43 billion as a result of crime-related incidents. That represents a 1% rise on 2004, driven mainly by increases in customer theft.

Post-2000, the retail industry has now invested well over £4 billion in crime prevention, which averages out at around £723 million per annum. In 2005 alone, the huge sum of £676 million was invested (although that does represent a drop of 5% on 2004). The losses from crime and the amount invested to prevent it have cost the industry over £13 billion since 2000 (with an average yearly cost of £2.23 billion). The total cost of crime in relation to turnover fell to 0.86% in 2005 from 0.88% recorded for last year’s study.

One glaringly obvious deduction from the BRC’s report is that crime is having a proportionately larger impact on small and medium-sized enterprise (SMEs) retailers than their larger counterparts. The BRC feels this is probably due – at least in part – to the lack of resources such concerns have to allocate to security systems and security staff.

Of the SME retailers responding to the survey, 37% stated that they felt crime had increased during the past 12 months, while only 6% suggested crime had decreased. However, 49% of retailers quizzed stated that, in their experience, the levels of crime against their own business had remained about the same. Nonetheless, 46% of respondents suggested that their crime-related losses had certainly increased.

A total of 47% of retailers responding to the BRC stated that they had increased their investment in crime prevention during the past 12 months, compared to 3% who suggested that their investment had declined. Only 8% hadn’t spent any money at all on crime prevention. Worryingly, 15% of all retail SMEs have had to close their business for a time due to acts of criminality. 13% have reported an increase in violent robberies, one-in-five SMEs believe it’s either likely or very likely that they will lose staff as a result of crime, violence or other forms of antisocial behaviour and 13% of all those SMEs questioned have had to let members of staff take time off from work as a result of criminal incidents.

“The Government’s failure for planning prison capacity is no excuse for giving a licence to steal,” adds Kevin Hawkins. “Anyone who believes only violent crime matters is seriously misguided. The thieves responsible for the majority of retail crime are well organised and efficient. On average, they’re making off with £149 worth of goods every time they steal.”

With great conviction, Hawkins continues: “Shop theft is an entry level crime which can – and does – lead to more dangerous criminal activity. Removing deterrents also increases the risk of violence against shop staff. There must be a prison sentence for those who repeatedly and persistently break the law, and treatment for those responsible for drug-related offences.”

Nationwide strategy is needed

The BRC has told the Home Office that it feels there remain “compelling reasons” as to why there should be a national strategy for tackling business crime. That strategy, according to Hawkins, should be driven by a Steering Committee whose members would include the relevant minister and senior representatives from the retail sector.

“This body would ensure that policy on retail crime is not made in isolation,” comments Hawkins, “thereby avoiding the kinds of problems that arose when fixed penalty notices were first introduced for commercial theft and criminal damage. We cannot afford to treat retail theft as a totally separate entity.”

While the incidence of violence against retail staff, internal theft and fraud are all down on last year, intimidation, abuse and assaults are still a major problem for all retailers. The BRC highlighted these problems last year with the launch of its Stop Crime Against Retail (SCAR) Campaign. Hawkins is adamant that this drive will continue in the next year. Another priority is to develop an effective response to crimes committed by organised gangs whose activities cross police boundaries, while at the same time reducing the opportunities for retail crime in the fast-growing Internet market.

The BRC is clear in its recommendations. Any review of shop theft sentencing should focus on appropriate deterrents and sentences for shop theft rather than merely freeing up prison space. In addition, the system of crime reporting by police services needs to be modified to specifically capture the incidence of crime against businesses. The Government should acknowledge that violence and abuse in the retail arena is as unacceptable there as it is in any other part of society. It should then instigate a renewed communication campaign – with the support of the retail sector – to raise awareness of the impact of violence, and send out a clear message that there will be zero tolerance for offenders.

Crime reporting by victims must be encouraged to aid a fuller analysis of the true extent of retail crime. There is certainly much scope for enhanced partnerships between the retail sector, the Government and the police to investigate and encourage retail engagement with local police in influencing the determination of local policies and priorities.

In light of the £723 million spent annually on retail crime prevention, the Government should also review incentives and disincentives to the supply of security products.

Copies of the BRC’s Retail Crime Survey 2005-2006 (ISBN 0-11-703679-X) are available priced at £90 for BRC members and £100 for non-members.