UK retail crime costs reach a record high

The annual cost of retail crime to British businesses hit a new high in 2014 - 2015. According to the British Retail Consortium’s Retail Crime Survey 2015, the direct cost of crime to the UK retail industry rose to £613 million. This was a rise of 2% over the previous year and the highest total since records began.

The total cost was also more than three times higher than it was in 2007-2008. The rise was driven by an increase in fraud, including online attacks, as well as criminal gangs stealing high-cost goods such as hi-tech gadgets and designer clothing to order.

The total number of offences actually dropped for the second year running. 750,144 incidents were reported but the higher value of items stolen helped drive the cost upwards. According to the BRC, this was evidence that retailers were increasingly being targeted by sophisticated criminal gangs. Some 40% of thefts were attributed to gangs and the average cost of stolen goods rose sharply by over a third to £325 per incident.

Many retail businesses build the cost of crimes and related insurance into their annual budgets but a rise in these costs could have a serious impact and could even leave some businesses facing business insolvency if they operate on especially tight budgets.

Customer thefts still accounted for the majority (83%) of incidents but thefts by employees cost an average of £788 more than each customer theft. These ‘insider’ threats, including fraud, were often overlooked, the report said.

Fraud as a whole, including online cyber-fraud, has risen significantly. The costs of fraud were up 55% on the previous year and now accounted for just over a third (36%) of the costs of crime for retailers.

Employees were also increasingly targeted. There was a 28% increase in offences involving abuse or violence towards shop staff. In the year 2014-2015 41 out of every 1,000 crimes involved offences against staff, compared to 32 out of 1,000 the previous year.

Businesses need to take the appropriate action in such circumstances to ensure that both staff and their goods are protected. Paying upfront for preventative measures may be beneficial in the long run if it stops the brand being damaged for any reason.

By Phil Smith

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