How grocers can safeguard against shrink

While more Canadians are pinching pennies to contend with soaring food prices, others are pinching items off grocery store shelves. Though theft is an issue outside of recessionary times, food inflation has consumers under strain and it’s fuelling an increase in stolen goods. Canadian Grocer recently asked Stephen O’Keefe, president at Bottom Line Matters in Georgetown, Ont., for advice on how grocers can try to safeguard against shrink, and the important role employees play in these efforts. This interview has been edited for length and clarity.

Grocers have always had to contend with theft. How has the issue evolved or grown more complicated in recent years? 

We are at a point where there is a perfect storm happening that presents conditions whereby shop-theft is increasing. Overburdened courts, law enforcement resource issues, violent crime and socio-economic conditions have either inspired or provided an excuse for seemingly honest people to do dishonest things. They chalk it up to an “honest mistake” when confronted. 

What impact is this having on grocers?

For grocers, this means a few things. There remains less room for markdown to move slow-selling product and offer deals for customers. It eats away at profitability. Arguably, this is more of a concern for smaller independents; grocers are forced to raise prices to stay afloat and, as we’ve seen recently in the U.S., it’s forcing retailers to shutter their doors and exit the geographic area where crime is rampant.

What strategies should grocers consider for loss prevention?

Policy, people, technology and data! It is important for a grocer to operate their business on a foundation of risk management. They are well versed in this notion since they deal with food safety and security. The same logic should be applied to loss prevention, not as a separate program, but rather as an embedded loss prevention management system in every area of the business. 

Which grocers are getting loss prevention right and why?

All grocers do some things very well, but there are always challenges to do everything right. That is why a loss prevention system must be reviewed on a regular basis. There are a number of grocers, however, who have a loss prevention professional on staff to advise on the direction of business activity. Rather than reacting after the fact, a preventative strategy suggests the loss prevention executive has a “seat at the table” when big decisions are being made. They look at things through a different lens. 

What role do employees play in loss prevention efforts?

Employees are the ears, eyes, hearts and minds of the grocer. They generally know what the issues are. Before expensive programs or technology is incorporated, I would always advise a client to sit down with a focus group of employees to hear them out. The employees are the No. 1 line of defence against criminal activity. Most shoplifters—the traditional shoplifter and not the violent offender—can be persuaded to think twice about stealing with simple one-on-one customer service. Acknowledgment removes the opportunity to steal without being exposed or identified, and most casual shoplifters still fear the intervention of law enforcement and subsequent prosecution. 

How common are self-checkout scams?

Self-scanners do pose a challenge and dishonest customers undoubtedly have taken advantage of the lower level of supervision on these devices. There are new technologies, however, that detect [when shoppers] fail to scan or [an] incorrect product scans. Separate from the weight scales, these systems can detect and send silent alarms to security personnel who have the right to take action up to, and including, prosecution for theft or fraud. 

What are some common tricks thieves use at self-checkout?

As an industry, my colleagues and I refrain from openly discussing techniques thieves use. We have realized that past discussions of this nature are shared amongst the criminals online, almost as a shoplifting training camp. I can tell you where we do know the “tricks” we are actively and aggressively looking for ways to identify and take action against bad actors. 

This article was first featured in Canadian Grocer’s May issue.