By Emma Koehn
The words organised crime might not immediately conjure images of illegal operations targeting the aisles of your local Coles, but this week the supermarket giant mentioned the trend that has captured the attention of investors and shoppers.
In her maiden set of full-year results, Coles boss Leah Weckert said the grocery giant was fighting a rising wave of theft, with total stock loss, which includes stolen goods and waste, climbing by 20 per cent for the year.
The chief executives of Coles and Woolworths both say the vast majority of consumers do the right thing.Credit: Michele Mossop
While the trend includes cash-strapped individuals shoplifting to counter rising costs, Coles made it a point to call out the larger, more co-ordinated, attacks on its stock.
“We have also seen an increased level of the organised crime side of stock loss which is more focused on some of our non-food areas where people come in and take large amounts of stock at the one time,” she said.
Coles rival Woolworths also pointed to elevated levels of theft this week, though boss Brad Banducci was keen to keep this in perspective, saying loss rates were merely returning to pre-COVID levels.
“I think this all needs to be kept in the right context – 99 per cent of our customers are amazing,” he said.
But the one per cent that’s walking into stores with an eye to stealing stock has got retailers across the world talking. These consumers are after non-perishable items that they can then easily resell online.
“It’s items such as razor blades ... items you see in the health and beauty aisles that are being taken and being resold,” Banducci said this week.
Woolworths Supermarkets’ managing director Natalie Davis told analysts this week that “high-value personal care items” like electric toothbrushes were increasingly vulnerable to theft, and that the grocery chain had been rolling out a number of initiatives to prevent this.
The focus on shoplifting surprised the market, which was keen to hear about how much money the grocers were making, and analyst were particularly concerned about how big a hole it was burning into Coles’ earnings margins.
But the Australian Retailers Association has been pointing to the threat of theft throughout the year, while consumer brands in the US and UK have also been highlighting what they say is more sophisticated retail crime.
The organised nature of the theft has already prompted retailers in the UK and the US to take evasive action. Upmarket UK grocery chain Waitrose called out a rise in offenders engaging in regular, co-ordinated shoplifting across its stores this year. This week The Guardian reported the business was offering free coffee to police offers in a bid to encourage law enforcement presence at the retailer.
Target, Walmart and Home Depot have all pointed to similar issues in the US, with an increase in stock loss thanks to theft.
In Australia, it’s not clear how much the situation is costing retailers, with neither group putting an exact price tag on lost stock. There’s also not yet evidence that this represents a sustained increase in crime, rather than a bounce-back from the COVID years.
Police regularly liaise with retailers around crime and public safety.
“In the time of COVID, a lot of these [theft] activities didn’t occur,” Banducci said.
Crime statistics in both Victoria and New South Wales suggest that while recorded incidents of stealing from retail stores are up on 2021 and 2022, there is not yet data that showing rates are higher than before the pandemic.
But retail crime is worrying unions and industry groups, who say shop workers are facing increasing aggression having already been under three years of sustained pressure through the pandemic.
Australian Retailers Association chief executive Paul Zahra.Credit: Alex Ellinghausen
“One in four cases of retail theft also involves abusive or threatening behaviour towards staff,” said Australian Retailers Association boss, Paul Zahra.
Banducci said this week that aggression towards staff at Woolworths stores was more of a worry than stock loss itself. There were more than 3000 acts of violence, threats and abuse reported at the retailer over the past 12 months.
The union for retail, fast food, warehouse and online retail workers, the SDA, says that the industry should focus on “workplace design that inhibits theft as well as instances of customer abuse”, given that retail staff should never be putting themselves on the front line to fight theft.
“The SDA’s long held and very firm position is that shop assistants are not security guards and must not put themselves in harm’s way or be required to do so by their employers,” SDA national secretary Gerard Dwyer said.
The major supermarkets use security guards in their stores as a loss prevention tactic, but these professionals also have limited powers, especially after an individual has left the store.
It’s against this backdrop that Coles and Woolworths are increasingly turning to technology as their first line of defence against shoplifting. Both stores are rolling out tools like ‘trolley locks’ and smart gates that stop shoppers from being able to coast out of their stores without paying.
The two supermarket giants have also been training their self-service checkouts to spot possible theft, using cameras and artificial intelligence to track the movement of items into shopping bags.
Coles said it had also had increased collaboration with police in all states on the issue. Victoria Police said it regularly liaises with retailers “around crime and public safety concerns”, while NSW Police said it conducts “regular proactive operations targeting retail theft across the state”.
“Officers work closely with shopping centre management, as well as loss prevention officers and other relevant stakeholders to run these proactive operations, which occur regularly throughout the calendar year across the state,” a spokesperson said.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.