Food retail theft: Is there a solution?

Retail theft is a growing problem, and it’s having a serious impact on food businesses. In America, the National Retail Federation (NRF) reports that losses from retail theft reached USD $112 billion in 2022, up 19% from 2021. 

In South Africa, food theft is the most common form of shoplifting – a significant 68% of all 6,001 shoplifting cases filed in the country between 2021 and 2023 involved food products. Nicro, a non-profit that aims to reduce crime and violence in South Africa, ranked food theft first in their data – with 791 women, 788 men, and three LGBTIQA citizens accounting for 1,582 arrests in total.

And in Australia, where retail crime spiked 47% over the last year, food is among the top three categories of goods stolen from shops. 

But retail theft isn’t just down to individuals

In the US, reports suggest that organised retail crime is now responsible for about half of the theft losses. This means that the problem is bigger than individual households stealing food to feed their families – criminal groups are stealing products to resell for profit.

The impact of this is most obvious when major retailers have to close stores – including Whole Foods, which closed its flagship San Francisco store after only a year, because theft was so frequent; and Walgreens, which has begun closing high-theft stores (including one in San Francisco). But small retailers are being affected too – their closures are less likely to be reported in the media, but hundreds of independent businesses are closing their doors every day as a result of high levels of theft. 

Retailers are having a hard time trying to manage in-store theft. And that means store closure is often the only option left available.

Most countries don’t require companies to report losses due to theft. But as these losses become increasingly problematic, some retailers are sharing their numbers to highlight the extent of the challenge. In May 2023, US retailer Target (not a food retailer, but still a useful indicator of the issue) told CNBC that it was projecting a theft loss of $900 million in 2023. And Walmart estimated an annual loss of $3 billion. 

In the UK, Sky News recently reported that food retail chain Co-op lost GBP £33 million in the first half of 2023 as shoplifting cases ‘hit a record high’. 

Retail theft affects consumers as well as companies 

Increasing retail theft has a negative impact on consumers as well as businesses, with results including: 

• Higher prices. Retailers have to put their prices up in order to remain profitable in spite of theft losses.
  
• The shopping experience becomes more complicated, with high-friction solutions put in place to reduce theft – such as locks on freezer doors to prevent access to frequently stolen items.
  
• Limited shopping options. As more retailers close stores as a result of unmanageable levels of theft, customers may not have easy access to certain products.
  
• Increased risk of violence. Retail theft sometimes leads to violent crime, putting customers and store employees at risk. 

What’s the solution? 

It’s a growing and complex problem – and theft is committed by organised crime groups on a large scale, which drives staggering losses for retailers in the food industry and other sectors. But closing stores can’t be the only solution. 

Existing and potential measures include: 

• Implementing or improving security systems. CCTV cameras, security personnel, and electronic article surveillance (EAS) can help to deter theft and catch perpetrators.
  
• Data analytics can enable retailers and law enforcement agencies to identify patterns of theft, and understand the areas, stores, and product types that are most at risk.
  
• Collaboration between retailers and law enforcement agencies can enable more efficient theft reduction strategies – for example, sharing data on theft patterns, and sharing information to support investigations.
  
• Addressing the root causes of theft. Through collaboration with policy makers, retailers can support an expanded understanding of the causes of theft – and establish initiatives that address those root causes. Those initiatives might include job training, employment opportunities, and community support.
  
• Building internal teams to understand and prevent retail crime. NRF’s 2022 survey found that 69% of US retailers don’t have organised retail crime prevention departments – and establishing teams dedicated to this could make a significant difference.
  
• Increased monitoring, or reduced use of, self-checkout systems. According to Business Insider, when Walmart removed self-checkout lanes from three of its stores in New Mexico, it saw a 30% increase in retail sales.
  
• Ensuring staff are appropriately paid and supported. NRF data shows that 29% of retail theft comes from insiders – employees who steal products. Making sure that staff are paid a living wage and given appropriate benefits so they can cover their basic costs, as well as fostering a healthy and positive company culture, could help to reduce this.

There is no single solution, as a one-size-fits-all approach doesn’t exist. Different retailers and different regions need to work with the law enforcement regulations and measures available to them; and as a whole, the food industry can collaborate to generate new ideas that could reduce theft.