Continuing a trend that began in 2002, retailers in Europe saw a decline in losses for 2006 compared to 2005, according to survey statistics compiled by the Centre for Retail Research in Nottingham, England. The 1.24 percent-of- turnover rate was, however, still significant, totaling 29 billion euros ($37.7 billion).
The report attributed the trend to a drop in retail crime, crediting expanded 'good practice' throughout retail industries in the 24 countries it covered. The report further noted that spending on security and crime prevention in Europe rose to 7.99 million euros in 2006, a 356 million euro increase over the previous year.
Retailers are under pressure to minimize losses from crime and wastage given that they face added pressures such as competitive markets, weak consumer demand, and an uncertain economic outlook, the report noted.
The downward trend in the shrinkage rate was not uniform. Fifteen of the countries polled suffered a slight increase in average shrinkage, particularly Central European nations. The highest rates occurred in the Czech Republic, Slovakia, and Hungary. On the other hand, larger Western European nations were among the countries that reduced their shrinkage the most. The lowest rates were found in Switzerland, Austria, and Germany, consistent with past years.
The most-stolen items are relatively the same across all regions of Europe. They include perfumes and fine fragrance, spirits and champagne, both designer wear and women's wear, cosmetics and skincare, razor blades, DVDs and CDs, video games and MP3 players, mobile phones, laptops, and software.
To combat theft of commonly lifted items, retailers have resorted to a variety of protective measures. Most drastically, certain goods have simply been withdrawn from store inventories. Other products have been placed in locked cabinets or shelves, or are shielded by chains, cables, and loop alarms.
In other cases, empty cartons are displayed in lieu of the actual items. Electronic article surveillance (EAS) tags, both overt and concealed, have also been used so some products can be displayed openly.
The report cited EAS as both the single most important protection method, and the most common on clothes and spirits. EAS source tagging - in which tags are applied during manufacture or along the logistics chain - is gaining popularity.
"The figures in this report suggest that by mid-2008, a combined total of around 73.9 percent of large retailers in Europe will be using source tagging," the report said. That is about double the percentage of source tagging currently used by the survey's respondents.
Radio Frequency Identification (RFID) protection was also expected to become more widespread. More than one-third of large European retailers expect to run RFID pilot programs within the next few years, and half of them will kick off their programs within the next 12 months. Large-scale implementation of an RFID tagging system usually takes two years from the start of a pilot.
The survey covered countries with a combined population of 461 million people. It relied on data from more than 450 large European retailers who operate more than 28,000 stores and are responsible for 422 billion euros of retail turnover.