THE RETAIL BULLETIN - The home of retail news
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
The Papers
Retail Solutions
Food & Drink
Interviews
Property
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
Health of retail sector set to suffer further as downturn becomes a recession.

It will probably not come as a huge surprise that the latest KPMG/Synovate Retail Think Tank (RTT) assessment of the state of retail health predicts that the health of the industry is set to suffer further, as the downturn officially becomes a recession. By Helen Dickinson

GENERAL MERCHANDISE

Health of retail sector set to suffer further as downturn becomes a recession.

It will probably not come as a huge surprise that the latest KPMG/Synovate Retail Think Tank (RTT) assessment of the state of retail health predicts that the health of the industry is set to suffer further, as the downturn officially becomes a recession. By Helen Dickinson

The RTT's latest discussions concluded that margins are increasingly under pressure, after an unprecedented period of pre and post-Christmas discounting, while demand is being hit amidst the daily reports of the worsening situation regarding unemployment. However, one brighter piece of news from the panel's findings was that the negative impact on retail health of cost rises has eased as the effect of less rental pressures and cost cutting s
trategies kick in.

But as the wintry economic climate continues to have an impact upon the sector, and looks set to stay for some time yet, is there anything that retailers can be doing to take the pressure off?

One thing that can have a positive effect on the bottom line is ensuring that as much stock as possible stays where it should - on the shop floor, safely stored in stock rooms or in the bags of happy paying customers.

The 2007-2008 Retail Crime Survey from the British Retail Consortium (BRC) found that both customer and employee thefts decreased in line with the national downward trend in crime since 1997. But despite the fall - by 26 percent and 56 percent respectively in the twelve months to April 2008 - crime still cost the industry £1 billion during that period.

On a similar subject, another piece of research I spotted recently was the Centre for Retail Research's Global Theft Barometer 2008 which surveyed 36 countries. It found that in these locations, shrinkage and crime cost over US$100 billion, equivalent to 1.34 percent of retail sales.

According to this piece of research the most stolen items of merchandise included branded or expensive products such as cosmetics and skincare, alcohol, womens' wear, perfume and fine fragrances, and designer clothing. Razor blades, DVDs or CDs, video games and consoles, small electric items and fashion accessories also featured high on the hit list.

But it seems that trends could be changing in the kinds of products targeted. One interesting news story that I've seen recently is that meat is increasingly being stolen, with one Police Chief Constable stating that goods including large packets of bacon were being targeted in his community.

It goes without saying that protecting valuable stock is important. But if retailers are forced to use electronic tags to prevent everything from the small, high value items which have traditionally been attractive to shoplifters to packets of meat, it presents yet another cost they could do without having to consider.

But as the impact of the recession deepens, so the motivation for individuals to commit crime does too. The BRC's report highlights that “the Home Secretary has warned of a significant growth in violent crime, theft and burglaries. Retailers have already begun to report an upturn in such offences.”

The old saying “where there's a will, there's a way” seems pretty appropriate in this situation. If individuals are prevented from stealing the usual products, there is always something or somewhere else to target. And this is where retailers need to be on their guard - the current environment means that the crime perpetrators will become more innovative and creative than ever before. With company profits under pressure, an increase in shrinkage is not a cost many can afford to take on the chin.

So, whilst cost cutting in some areas may certainly pay dividends, I don't think that trying to reduce the cost of security is one where the savings will pay off.

Helen Dickinson is Head of Retail at KPMG

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

Customer Engagement Conference 2019
Customer Engagement Conference 2019
5 June 2019
Cavendish Conference Centre, London W1
The 10th Annual Retail Customer Engagement Conference
The HR Summit 2019
The HR Summit 2019
8 October 2019
Hallam Conference Centre, London W1W 6JJ
The 11th HR Summit 2019, Hallam Conference Centre, 44 Hallam St, Marylebone, London W1W 6JJ
AI in Retail Conference 2019
AI in Retail Conference 2019
16 October 2019
Cavendish Conference Center, London W1G 9DT
Digitally native competitors and demanding customers are forcing a new perspective in retail. AI and machine learning can help you step up to the challenges; and some ‘small and beautiful’ solutions can increase your conversion rates within just a few weeks.
Omnichannel Futures Conference 2020
Omnichannel Futures Conference 2020
5 February 2020
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy