UK high street warned to brace for impact as festive shoplifting likely to impact profits

Major high street retailers in the UK should be bracing for impact as shoplifters are set to significantly erode their profits over the next two months in the run-up to the busy Christmas shopping period, a new retail report has claimed.

Perhaps unsurprisingly, the report claims that luxury foods and electronic items are expected to be the most stolen items this festive season.

The reasons, it claims, the higher quantities of stock will be on the shop floor, temporary staff will be unprepared to deal with thieves, and there will be a higher footfall than normal.

"Over the next two months alone, dishonest shoppers and employees will steal merchandise totalling 38% of losses incurred over the entire year," the report asserted. "Retailers are caught between attracting seasonal shoppers and protecting their merchandise."

The study, sponsored by Checkpoint Systems, was carried out by Ernie Deyle, a retail loss prevention analyst, and provides a view of the business risks that major retailers will face during the upcoming holiday season.

Neville Payne, vice president of merchandise availability at Checkpoint Systems, said: "Retailers are faced with the difficult task of ensuring they can manage the influx of customers, as well as protecting their merchandise and ensuring it is available for honest shoppers to purchase.

"It's important not to compromise on the bottom line over the festive period by taking shortcuts, training and security compliance are easy steps to ensure a successful Christmas.

"From October to December, gross margins will be reduced by 3.26% with the rate of erosion leading to a 9.8% decline of realised margin captured," the report claimed.

The analysis added: "Annually for every £77 in sales there is £1 worth of 'loss value' incurred. However, during the Christmas season, the run rate is expected to decline to £61 in sales for every loss value incurred."

The report singled out a number of the "most at risk" products this Christmas. The grocery retail sector, which is reportedly under pressure from the rise of discount stores, will see alcohol brands targeted, it claimed. Other items that ranked highly in the report included leather jackets, designer winter costs and easy-to-conceal make-up and perfumes.

The report recommends that retailers address a number of key issues, including thoroughly training seasonal help and new-hires, using the right technology to "stabilise inventory loss and ensure on-shelf availability" and ensuring that "seasonal deliveries" are well managed.