Retailers say $9bn stolen from their shelves is a national productivity problem

Theft is a constant threat to Australia’s retail workforce. Now, the retail peak body is asking Jim Chalmers’ productivity summit to consider it an economic threat too.

Retail theft, from shoplifting to organised gangs and ram raids, is a $9bn problem according to the Australian Retailers Association. Picture: Alan Barber

A crime spree gripping retailers is costing Australia’s largest private sector employer $9bn a year in damages and stolen stock, compelling the nation’s peak lobby group to put crime on the agenda at the Treasurer’s productivity summit.

The nation’s retailers have faced a sustained spike in crime since Covid-19. They describe steaks hidden in clothing, organised crime gangs swarming stores, ram raids and armed robberies as behaviour threatening their staff and businesses.

Deep pocketed retailers can afford to spend millions of dollars upgrading security, such as alarm tags and guards patrolling the shopfront. The industry now argues that getting tough on theft is a way to improve Australia’s spluttering productivity rate.

Theft is a $9bn a year problem in costs, damages, security and missing merchandise. Picture: Kelly Barnes

The Australian Retailers Association and the National Retail Association pleaded with the Albanese government for a national response to combat retail crime through the harmonisation of legislation state by state, backed by a support program for small to medium sized businesses.

The groups, which will merge to form a single voice for the $430bn retail sector called the Australian Retail Council, put the annual cost of crime at $9bn and want to see this reduced by 50 per cent by 2030.

Coles is slapping security tags on meat. Picture: Reddit

Crime statistics have underlined the protracted theft and threats made across the country’s shopping centres. There were around 800,000 retail crime incidents reported across Australia in the past year, and 16 per cent of all events included threatening or violent behaviour, and more than half of those were ‘serious’, according to the Australian Retailers Association. Ninety one per cent of those members surveyed said they have experienced retail crime while around 2.3 per cent of merchandise simply disappears - colloquially known in the industry as “shrinkage”.

Elevating crime to a productivity issue is part of a suite of recommendations from the lobby group’s for Jim Chalmers’s productivity summit next month.

At the top of their wishlist is a “national harmonisation taskforce” with retail as a priority sector to correct inconsistencies in trading hours, payroll tax, environmental regulation (including plastics), freight and transport rules, health and safety obligations, retail crime legislation, tenancy law, and product labelling and compliance.

Halving the cost and severity of retail crime would deliver major dividends to the economy and the retail workforce, they argue.

“Retail crime is a growing national challenge, with rising incidents of theft, aggression, and organised crime affecting the safety and viability of retail workplaces,” the joint submission reads.

“In addition to the human and social toll, retail crime imposes significant operational and compliance costs, particularly on SMEs that lack the scale to absorb these impacts.”

As the pandemic gave way to a cost-of-living crisis in 2022 and 2023, retailers voiced their concerns about rising crime rates and realised thieves were targeting anything they could steal from fashion to groceries. Theft from stores jumped 23.7 per cent in 2022, the fastest pace of growth in retail crime since records began in 1995, according to the NSW Bureau of Crime Statistics and Research.

The country’s biggest department store owner Myer revealed theft at its stores over the December half in 2023 shot up to 1.7 per cent of wholesale sales from 1.1 per cent, representing a five-year high.

Supermarket chain Coles, and general merchandise stores Kmart and Target (both owned by Perth-based conglomerate Wesfarmers) also called out rising rates of shrinkage at their latest earnings.

Coles chief executive Leah Weckert highlighted the growing theft problem during the retailer’s full-year results, blaming a new and worsening crime spree for contributing to a 20 per cent increase in lost food and grocery stock.

To combat this, Coles invested heavily in technology such as CCTV and cameras at the checkout, trolley locks, as well as special ‘smart gates’ at self-service check-outs to ensure groceries are scanned and paid for.

Even The Reject Shop reported crime was a blight on its profit.

“Australia’s retail sector operates across every state, territory, and community, yet faces a policy and regulatory environment that is fragmented, duplicative, and increasingly unfit for purpose,” the submission said. Retail crime enforcement should be part of this fresh approach, it said.

Originally published as Retailers say $9bn stolen from their shelves is a national productivity problem