The European food and fast-moving consumer goods sector is losing anything up to 2% of its turnover – estimated at GB pound 31 million per day – through ‘shrinkage’ attributed to staff and customer theft.
More worryingly, most of the major retailers don’t seem to know where, how or when most of their losses are occurring. GB pound 6 billion of stock loss cannot be accounted for in this sector, which has a combined turnover in excess of GB pound 500 billion per annum.
These startling figures appear in the latest report published by ECR (Efficient Consumer Response) Europe. Entitled ‘Shrinkage: Introducing A Collaborative Approach to Reducing Stock Loss in the Supply Chain’, the report suggests that retailers and their consumers are footing a bill totalling GB pound 11.2 billion each year, of which GB pound 5.6 billion is lost directly through staff and customer stealing.
No part of the sector was found to be immune from the problem, which affects all facets of the supply chain from point of manufacture to the point of sale.
In addition, the fast-moving consumer goods sector is characterised by the “lack of a co-ordinated [security] approach to dealing with the problem”, states the report, with little evidence of co-operation between or within many of the major producers.
Launched at the recent 6th ECR Europe Conference in Glasgow in front of 3,000 delegates, the report has been put together by a dedicated band of researchers at The Cranfield School of Management and the University of Leicester’s renowned Scarman Centre. It provides security managers in the sector with an easy-to-follow, seven-point plan aimed at reducing stock losses, at the heart of which is a strong emphasis on collaboration and co-operation.
Speaking about the report Colin Peacock, co-chair of the ECR Europe Stock Shrinkage Group and a representative of one of the leading manufacturers in Europe, told SMT: “There is very good reason to believe that, if both retailers and manufacturers work together in the years ahead, the industry could begin to reduce its losses quite considerably.”
Dr Paul Chapman, a senior research fellow at Cranfield and co-author of the report, added: “Few of the companies we studied had even the simplest structures in place to guide their approach to reducing stock losses, nor were they able to determine the effectiveness of any of the solutions they currently use to reduce it.
“What we have done is to develop a ‘road map’ for security managers and loss prevention specialists so that they can co-ordinate their plans of action.”
