The focus, more than ever, is on the bottom line. With that in mind, retailers and wholesalers are stepping up their attacks on employee and consumer theft.
Nearly two-thirds of distributors plan to expand or upgrade their loss-prevention programs this year.
Nearly three-quarters of retailers and wholesalers rate loss prevention a highly important issue at their firms.
Nearly two-thirds of distributors plan to employ antitheft programs that include closed-circuit television surveillance, security guards, electronic cashier monitoring and electronic article surveillance to some degree in 1996.
Those were among the major findings and broad trends revealed in the area of loss prevention in SN's second annual State of the Industry Report on Supermarket Technology.
The report was based on a nationwide survey of senior executives at 103 supermarket chains, independent operators and wholesalers. The companies combined accounted for more than $149 billion in annual sales in 1995, and included 36 companies with sales of $1 billion or more and nine with sales of $5 billion or more.
The survey was developed by SN Productivity section editors and conducted by the Market Research Department at Fairchild Publications, New York, which publishes SN.
Among the loss-prevention highlights of the report:
Retailers and wholesalers increasingly are determined to take the necessary steps to prevent losses due to employee and consumer theft and thus shore up net profits.
Nearly three-quarters of companies surveyed, 74.7%, including 82.7% of retail chains and 50% of wholesalers and independents, said they now have some form of loss-prevention program in place to deter theft.
Even more telling about the importance distributors today place on this issue, however, is the percentage of companies planning to expand or upgrade their systems further in 1996.
The survey revealed that nearly two-thirds of respondents, 65.7%, including similar percentages of retail chains, wholesalers and independents, plan to significantly expand or upgrade their loss-prevention systems in 1996, up from 49.3% for 1995.
COUNTING THE LOSSES
When asked to estimate losses due to employee and consumer theft at their companies, the vast majority of respondents, 84.2%, said losses totaled 2% or less of store sales.
More specifically, 42.1% of respondents said losses at their companies equaled less than 1% of total store sales, with similar percentages among retail chains, wholesalers and independents. The same overall
percentage said losses equaled 1% to 2% of sales, with 40% of retail chains and 57.1% of wholesalers and independents falling into this category.
For other distributors, though, losses due to theft remain a much more serious problem. A full 12.3% of survey respondents (all retail chains) said losses due to theft represented 3% to 4% of total store sales.
An additional 3.5% of respondents (also all retail chains) said losses reached 5% to 6% of their sales.
RESPONSE TO THE THREAT
Asked to rate the importance of loss prevention in the supermarket industry today, nearly three-quarters of respondents, 73%, characterized it as extremely or highly important. That percentage included 80.3% of retail chains vs. 50% of wholesalers and independents.
Another 24% of respondents, including 18.4% of retail chains and 41.7% of wholesalers and independents, described loss prevention as a moderately important issue. Only 3% of respondents rated loss prevention as an unimportant issue.
In terms of who they are targeting their loss-prevention efforts toward -- employees or consumers -- a majority of survey respondents, 56.1%, including 56.9% of chains and 50% of wholesalers and independents, said their programs are geared more toward stopping shoplifting.
On the other hand, another 40.9% of survey respondents, including 39.7% of chains and 50% of wholesalers and independents, said their loss-prevention programs are aimed primarily at employees. An additional 3% said their programs are designed to reduce theft among both employees and consumers equally.
WEAPONS OF CHOICE
In terms of which loss-prevention method distributors are employing to stop the losses, 78.1%, including 82.3% of retail chains and 54.5% of wholesalers and independents, said they are using closed-circuit television cameras as part of their program.
Another 69.9% of respondents, including 71% of retail chains and 63.6% of wholesalers and independents, listed uniformed or plain-clothed security guards as one of the loss-prevention methods they are employing.
Electronic cashier monitoring was listed by 61.1% of retailers and wholesalers, with the same percentage citing the use, at least to some degree, of electronic article surveillance programs at their firms.
Another 41.1% of distributors, including 43.5% of chains and 27.3% of wholesalers and independents, said they are using third-party hot lines or reward programs to stop theft.
Using Loss-Prevention Systems
About three-quarters of companies said they now have some form of loss-prevention program to prevent theft.
Are you currently using some form of loss-prevention system at your stores?
COUNTING THE LOSSES
Just over 42% of respondents said losses due to theft represent less than 1% of sales at their stores, while 3.5% said losses totaled 5% or more of sales.
Estimate the amount of losses due to theft as a percentage of store sales.
LESS THAN 1%
1% TO 2%
3% TO 4%
5% TO 6%
STOPPING THE LEAKS
Closed-circuit television surveillance is still the most frequently used loss-prevention method. But security guards, electronic cashier monitoring and electronic article surveillance also rate high on the list.
Which of the following are part of your loss-prevention program?
CLOSED-CIRCUIT TELEVISION SURVEILLANCE
UNIFORMED OR PLAIN-CLOTHED SECURITY GUARDS
ELECTRONIC CASHIER MONITORING
ELECTRONIC ARTICLE SURVEILLANCE
THIRD-PARTY HOT LINE OR REWARD PROGRAM
UPGRADING LOSS-PREVENTION PROGRAMS
Nearly two-thirds of companies will expand or upgrade their loss-prevention systems in 1996, up from less than half in 1995.