As you will read in Progressive Grocer’s 90th Annual Report in our upcoming May issue, food retailers operating in North America today face a slew of hard challenges, from labor shortages to skyrocketing costs to dwindling profit margins. But there is another challenge lurking in the shadows, not being talked about enough in the industry, retailers say.
And that is asset protection.
At the 2023 RILA Asset Protection Conference this month in Denver, Colo., retailers such as Kroger, Walmart, Target, Dollar Tree and many others detailed incidents of e-commerce fraud, violence against store workers, self-checkout fraud, habitual criminal offenders taking advantage of an overtaxed under-resourced criminal justice system, rising organized retail crime losses, shrink numbers trending up, civil unrest, active shooter events, persistent unlawful activity on store property, and more events disrupting operations in profound ways. Session after session, grocery retailers said that the No. 1 threat to their business is lack of asset protection.
[Read more: "RILA Pilot Project Addresses Habitual Theft, Violence, Other Unlawful Activity"]
Chief of staff of the Manhattan district attorney's office, Jordan Stockdale, reported that retail theft has jumped 77% in New York City over the past five years. The CEO of Ulta Beauty, David Kimball, said his stores have seen a 50% increase in violent incidents in the past six months. Several law enforcement officials speaking on various panels at RILA said that retailers are describing the safety climate in retail stores as "total chaos." And Kroger’s director of asset protection, Chris Harris, discussed how the expiration of expanded SNAP benefits is going to lead to possibly even more incidents or threats.
“In March, the extra government push for SNAP benefits ran out,” Harris said. “And that means the average individual has roughly $85 less in grocery spend every month. Family of four, that's more than $300 less that they're going to have to spend on groceries. Now, they're still going to buy groceries, but not as much. So if sales go down, that's going to put more pressure on shrink. … Plus there’s the uptick in organized retail crime, in theft activity, there’s the decriminalization of minor shoplifting cases. All of that adds complexity, and these are the things that we're concerned about.”
Harris gave three reasons why Kroger has been at the forefront of experimenting with asset protection technology, and deployed a number of AI, machine learning and biometric solutions to help identify and prevent losses via what it now calls its “asset protection ecosystem platform.”
“First, we're a total loss organization. So, if it's a loss, we're involved. It could be ordering, buying practices, whatever, we're involved. It has been Vice President of Asset Protection Mike Lamb’s personal mission to improve the technology for reducing shrink at Kroger,” Harris said. “Second, Kroger is large. If you think of how much human capital we would need to accomplish what we can do with technology, there would be no ROI. And third, our CEO, the highest levels of leadership, embrace it. Sometimes you have to convince them, you have to educate them, you have to show them the benefits of the technology. But without that, you're going to run into roadblocks. So, really those three things at Kroger I think continue to drive us forward from a technological standpoint.”
In addition to leveraging emerging technologies, other leaders at RILA had the following advice for retailers facing increased threats, theft and other loss incidents:
- Call in everything. Even if the police doesn’t show up, encourage your store employees to report every incident to law enforcement so there’s a paper trail.
- Consider taking a stand or speaking out on regulatory and legal issues related to decriminalization of petty theft and other crimes.
- Build relationships with law enforcement and the local community via meet and greet events. Keep a dialogue flowing to build respect and empathy.
- Create technology bridges with law enforcement to track and identify habitual offenders who hit the same stores over and over.
- Consider participating in diversion and restorative justice programs with the minor offenders.