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Published in Chartered Accountants' ICAEW Magazine

Pressure on margins is changing security strategy in retail. Simon Chapman of Lodge Service explains how security systems can help reduce losses from theft – and give a return on investment.

Consumer demand and competitive pressures on margins tend to drive innovation in the high street and throughout the supply chain. This is the case increasingly with the adoption of new security measures to protect profits from losses to theft – a problem that continues to grow.

The cost of crime rose again last year for retailers, according to the 2012 Retail Crime Survey by the BRC, British Retail Consortium. It was up by 15.6 per cent to a total cost of £1.6 billion, whilst expenditure on crime and loss prevention rose by 7.1 per cent, to a median expenditure of £750,000 for each of the major retail organisations surveyed by the BRC.

With margins under pressure, retail chains are adopting new priorities for their security policy. The provision of a safe environment for staff and customers is no longer the overarching goal, not when losses to theft are too often the tipping point in the closure of stores on the high street.

The systematic targeting of higher value retail goods by organised criminals in particular has driven up costs. It has required a correspondingly targeted approach to security, to protect the most vulnerable products such as alcohol, meat, cheese and coffee, in the case of supermarket chains for example.

Similarly, the growing problem of staff theft has necessitated comprehensive and more covert protection on-site, including at the point-of sale and in delivery, warehousing and other areas in addition to the merchandising space.

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