Cranfield-ECR report tackles stock shrinkage problem

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A new report from ECR (Efficient Consumer Response) Europe and the Cranfield School of Management has revealed the true extent of stock losses to fmcg retailers throughout Europe. Shrinkage is already recognised as a particular challenge in the fast-paced travel-retail environment where stores often operate without physical or security barriers.

The report estimates that each year European retailers lose 2.31% of turnover through shrinkage, equivalent to $46m lost per day through staff or customer theft. More worryingly, most retailers do not know where, how or when most of their losses occurred. No part of the supply chain was found to be immune from the problem, from point of manufacture to the point of sale and the report found little evidence of a coordinated approach to dealing with such losses.

In the case of retailers, theft is seen as the biggest problem accounting for 60% of losses, whereas for manufacturers process failures are key, acounting for 78% of losses. Co-chairman of the ECR Europe Shrinkage Group Colin Peakcock commented: "There is good reason to believe that if both retailers and manufacturers work together to tackle the shared problem of stock loss, then the retail industry could start to reduce its losses significantly."

The report makes several recommendations including a seven-step road map to reducing stock loss with the tools needed to implement it. Security and audit departments make a real difference says the report: for retailers and suppliers, those with security departments experienced losses 27% to 39% lower.

An electronic (PDF) format of the report is available by contacting Katrin Recke at ECR Europe on email: ecr@ecreurope.com price Eur35.