PLEASANTON, Calif. — Safeway here recently became one of the first food retailers to join the Law Enforcement Retail Partnership Network (LERPnet), a new national database designed to collect data on retail crime, according to Kathleen Smith, Safeway's corporate vice president of loss prevention and chairperson of the Food Marketing Institute's loss prevention committee.
“We're just now getting involved [with LERPnet],” she said during a session on organized retail crime (ORC) earlier this month at the FMI Show and Marketechnics in Chicago. “It will be a real benefit.”
LERPnet was launched last month by the National Retail Federation and the Retail Industry Leaders Association, in collaboration with the Federal Bureau of Investigation. The database allows retailers to share information on retail crime incidents in an effort to help each other and law enforcement gather intelligence on trends in ORC.
Smith, a former Los Angeles policewoman, said that Safeway began addressing ORC about three years ago after realizing that it was suffering large losses in categories like baby formula. “We lost $6 million in less than a year in California on just one [stockkeeping unit] of baby formula,” she said.
Safeway estimated its overall annual loss due to ORC was $100 million. ORC costs the food retail industry as a whole about $15 billion annually, and retailing across segments about $37 billion per year, according to Safeway estimates.
Among the most commonly targeted ORC items, Smith said, are a wide range of health and beauty items, such as Pepcid, Oil of Olay, Trim Spa, Gillette Fusion refill cartridges and a variety of pain relievers, as well as baby formula (Similac and Enfamil).
To get a handle on the scope of the problem, Safeway conducted a study of two stores in which it compared the number of units shipped to the stores with the number of units scanned for the top 100 items targeted by organized crime rings.
In the initial study periods, the company found far more units shipped than scanned, pointing to a theft problem. But after instituting changes, such as employee education and a greater use of closed-circuit TV (CCTV) cameras in targeted areas, the disparity between shipped and scanned numbers began to lessen.
In using CCTV, Smith said it is important to capture “facial shots that are clear for identification purposes.”
To track shoplifting incidents, Safeway has stores file online reports describing what occurred, including the type of loss and the estimated dollar loss. Safeway also employs a questionnaire, provided by the NRF, for interviewing an apprehended shoplifter in order to gather information on the crime ring the individual may be participating in.
Safeway is sometimes able to retrieve stolen merchandise from warehouses used by crime rings. To distinguish its products from those of other retailers, Safeway marks targeted items as belonging to the chain. Smith urged retailers to educate senior management, as well as store employees and local law enforcement, about ORC.