Online purchases now account for 9% of UK retail – and online fraud for 4% of retail fraud, according to a new report.
The Retail Fraud Study 2012 found that in all, UK retailers lost £3.4bn last year as a result of theft and fraud – equivalent to one per cent of total sales. The figure was up by 10% compared to the previous year.
Researchers from Martec International interviewed loss prevention and ecommerce professionals from 100 of the top UK retailers – equivalent to 42% of the UK retail market – to produce the findings.
The growing losses are now almost as large as retailers’ profits, warns Martec, which says average pre-tax retail profits are worth 1.5% of sales.
Frances Riseley, Martec’s deputy managing director, said the losses were “surprisingly high”. She said: “It is common that in times of recession theft and fraud increases but this activity has cost UK retailers £3.4 billion in the space of a year.
“Worringly for retailers 22% of this was due to theft by their own staff highlighting the importance to retailers of installing a positive culture to prevent losses. These surprisingly high losses come against a back drop of a difficult trading period creating more uncertainty for UK retail.”
The report detected a trend towards a fall in the theft of higher-priced items but an increase in food thefts – joints of meat were the most commonly stolen – emphasising the effect of recession on everyday shoppers.
At the same time, however, spending on loss prevention by retailers was down, falling from 0.8% of sales to 0.7% of sales last year.
Payment and fraud are the subject of an upcoming Internet Retailing Jumpstart event, to be held on September 19. Click here to find out more about the session, which aims to get retailers up to speed quickly with the core issues in this area.
