Industry refuses to battle theft

Internal or external theft happens mostly at a retail level. Although the way products are designed and packaged has a great impact on reducing theft, manufacturers are not willing to lend retailers a helping hand.

According to Paul Chapman, senior research fellow at the Cranfield School of Management, most manufacturers see theft, which accounts for a major part of shrinkage, as a problem for retailers only. Chapman spoke during a workshop on shrinkage at the ECR Europe Forum in Milan, Italy.

"Collaboration on reducing in- or external theft is a rare occurrence. This is strange as there are benefits for both parties involved. Manufacturers could for example increase the on-shelf availability of their products," Chapman said.

Chapman, however, could imagine why manufacturers are having cold feet. "Retailers all too often want more than half of the potential cost savings. Clearly, this should not be the attitude to a collaborative relationship."

During the workshop Dutch retailer Albert Heijn (AH) and Procter & Gamble (P&G) talked about the introduction of Gillette Fusion. Both companies worked together to reduce theft without losing sales. This meant that the products were sold in the store and not over the counter. AH & P&G defined 10 process steps (check deliveries, regular counting, employee involvement) which boosted sales while minimizing in- and external theft.