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Shoplifting, Organized and Employee Theft Top Security Challenges: FMI

WASHINGTON, DC -- Employee theft accounts for 43.3 percent of total store losses, and cash is the top item stolen, according to a new report from the Food Marketing Institute.

The new study, "Supermarket Security and Loss Prevention 2005," examines the major loss prevention and security challenges facing the food retail and wholesale industry and how companies are combating them.

Cash finished ahead of last year's leader -- merchandise theft, which came in a close second. Cash is most frequently stolen by employees directly from the cash register.

In addition to key benchmarks, the report covers additional industry study material and cost-analysis information. It includes an 8-step program to reduce shrink at store level, and an essay from International Lighthouse Group president William Alford, FMI's loss prevention expert, on protecting the personal data of customers and employees.

"Retailers lose billions of dollars each year from shoplifting, employee theft and organized retail theft," said Anne-Marie Roerink, FMI director of research. "Even the slightest improvement in these areas will add significantly to the bottom line of every food retailer. This report offers benchmarks and areas of consideration that may help retailers evaluate and improve their loss prevention programs."

Shoplifting and organized retail theft (ORT) account for 29.7 percent of all losses. The number of reported shoplifting incidents decreased last year. The most-frequently shoplifted items were meat, health and beauty items, over-the-counter medication and baby formula.

ORT is a growing problem, in which theft gangs shoplift merchandise and resell the items throughout communities. It is a major concern not only because of lost revenue, but also because of safety concerns related to tampering, and repackaging and distribution potentially unsafe food. As much as 35 percent of shoplifters are linked to professional shoplifting gangs or ORT rings. Almost one-quarter (23 percent) of companies consider ORT a severe threat.

Among survey respondents, 90 percent reported employing at least one security or loss prevention person per company. Many companies offer formal loss prevention training for employees in headquarters offices and stores. Nearly two-thirds (63 percent) offer formal training for store managers.

A vast majority of companies (95 percent) have a relationship with law enforcement agencies and emergency responders. As part of the survey, respondents offered their key cost-saving security recommendations. The top two were employee training and education and digital closed-circuit television.
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