The Hindu Business Line : ‘Indian retailers don’t take retail theft seriously’

Chennai, Dec. 1 India has the highest retail shrinkage rate, stolen goods accounting for as much as 3.10 per cent of retail merchandise, says a survey. The Global Retail Theft Barometer 2008 Survey, covering 920 large retailers across 36 countries, says the country is closely followed by Mexico (1.68 per cent), Thailand and South Africa (1.59 per cent each), and Malaysia (1.53 per cent). Checkpoint Systems Inc, which develops and markets retail security and shrink management solutions, funded the survey which was conducted by the Centre for Retail Research, Nottingham, the UK .

Mr Dharmesh J. Lamba, Country Manager, Checkpoint Systems India Pvt Ltd, told Business Line that Indian retailers don’t take retail theft seriously and that they underestimate the extent of the loss that is being made. In mom-and-pop stores, for instance, the owners don’t feel the impact as they think manning the store themselves is vigilance enough. In large-format stores, it is difficult to check as wares are spread out.

Shoplifting is the maximum in the food and grocery categories, Mr Lamba said. And with the slowing economy, it could be on the rise, as it is in the European Union and the US, he added. In India, the stores surveyed were spread across several formats – hypermarkets, departmental stores, mom-and-pop stores – and were not confined to the metros, he said.

According to the report, the total shrinkage in India in 2008 is $2.543 billion. Customer theft contributed around 44.7 per cent of shrinkage losses and employee theft was responsible for 23.7 per cent as compared to 8.4 per cent by suppliers/vendors. Administrative errors accounted for the rest.

What retailers say

Business Line asked a few retailers to comment on the survey and its observations that Indian retailers are not taking shrinkage seriously. Mr Samar S. Sheikhawat, Vice-President (Marketing), Spencer’s, said that in his company’s stores, the shrinkage would account for 1.5 per cent of sales, most of which was due to systemic errors – bookkeeping, for instance. Of the rest, employees would account for 80 per cent and 20 per cent, customers. While the company has deterrents in place, including a loss prevention department, it has just begun to experiment with installing CCTV surveillance. “It’s an expensive technology and we are a large chain of large stores. The capital expenditure required for this defeats the benefits we get from it,” he said.

Mr Apu Gupta, Chief Marketing Officer of the Hyderabad-based MedPlus Health Services, which runs a network of pharmacies across several States in the country, says MedPlus is largely focused on the retailing of medicines and so “any theft we face would generally come from employees as all of our medicines are retailed from behind a closed counter”. The chain experiences shrinkage rates of less than one per cent, he said.

Mr B. A. Srinivasa, Director of the Chennai-based consumer durables retailer Vivek’s, says shrinkage is quite rare in stores such as his company’s, because most of the items are large and heavy. Because of their small size, mobile phones are susceptible to being stolen now and then. While they haven’t put in surveillance systems yet, they do have alarms and other deterrents in place, he said.