Aug 5, 2002
WASHINGTON, DC — August 5, 2002 — Food retailers report that shoplifting, check fraud and employee theft remain the greatest sources of annual losses, according to a new report released today by the Food Marketing Institute (FMI), 2002 Security and Loss Prevention Issues Survey in the Supermarket Industry.

“Loss prevention is a priority for all food retail and wholesale companies,” notes MaryAnn House, director of loss prevention at FMI. “This survey illustrates the areas of store operations that are most affected by theft. It also shows that retailers are taking action to minimize future losses.”

Shoplifting

Shoplifting continues to be one of the most common and costly types of loss for food retailers. The 59 survey respondents apprehended over 185,000 shoplifters in 2001, an average of 26.4 shoplifters per store. The average value of merchandise recovered per incident equaled $36.85, which amounts to approximately $6.5 million in merchandise recovered from all responding companies.

Shoplifting thefts occurred throughout the store, according to the report, with six particular types of products targeted most often: health and beauty care (HBC); meat; analgesics; baby formula; razor blades; and batteries. For the tenth year in a row, cigarettes have continued to decline as a shoplifting target due largely to recent laws governing the display and sale of tobacco products and limiting shopper access to them.

Check Fraud

Worthless checks continue to be a costly problem for supermarkets, resulting in a total net loss of approximately $192 million for companies in the survey. Companies accepted an average of 251,420 bad checks per company for an average net loss of over $4 million per company. The average value of each bad check was $68.37.

Retailers are incorporating more methods to prevent the acceptance of worthless checks. Consistent with previous years, the most common method is an internal authorization system at the point of sale. Slightly more than 80 percent of companies in the survey used an internal system. Other fraud-prevention methods used include outside authorization systems (55.4 percent) and check guarantee services (7.1 percent).

Employee Theft

Food retailers continue to be plagued by employee theft. An average of 544 detected theft incidents per company were reported last year, a 35 percent increase from 2000, according to the survey. The average value of cash/merchandise recovered in each instance of employee theft discovered was $264.60.

The cashier station was the location most often subject to employee theft — 44 percent of all thefts occurred here. About 26 percent of the detected incidents occurred in sales and service areas. Other departments targeted by employee thieves: customer service/courtesy booth, 10 percent; cash office, 8 percent; back room, 7 percent; and fuel stations, 1 percent.

A large proportion of thefts, approximately 50.4 percent, involved merchandise and/or cash theft. A combination of discounting or “sweethearting” and sliding (intentional failure to scan) accounted for an additional 25.3 percent of thefts. Additional theft areas included voids/refunds; snacking; backdoor theft; and fraudulent coupon redemption.

Other segments of the report contain information on robberies and burglaries, drug testing, theft hotlines, crime vulnerability, and security and loss prevention budgets and expenses. Changes in data trends from 1996 through 2001 are highlighted for key variables. Data are also presented for companies with stores in the Northeast, North Central, Southern and Western regions of the United States, as well as Canada.

To purchase 2002 Security and Loss Prevention Issues Survey in the Supermarket Industry ($25 FMI members, $50 nonmembers), visit the FMI Web site at www.fmi.org/pub or contact the FMI Store at (202) 220-0723.