Retail theft is a growing concern across all retail sectors, and liquor retailers are turning to new loss prevention methods amid profit losses, while industry bodies are calling for government action.
According to the NSW Bureau of Statistics, there has been an almost 13 per cent increase in retail theft between March 2022 and March 2024, and the Victorian Crime Statistics Agency reported its highest ever level of shoplifting offences in September 2023. Though some of this increase can be attributed to a return to normal offence levels following Covid lockdowns, retail theft rates are still rising.
Michael Waters, CEO of Retail Drinks Australia, spoke about how retail theft is specifically affecting liquor retailers.
“The issue of retail crime is undoubtedly one of the biggest issues currently facing the retail industry, particularly the retail liquor sector. We’ve seen significant increases in the rates of retail theft in member stores across the country, with alcohol reported as one of the most stolen items in the retail environment due to its high value, portability, and ease of consumption.
“Liquor retailers who have been targeted by thieves have reported losing hundreds, if not thousands of dollars’ of stock per incident, with many stores being subject to repeat offences and unfortunately violence is also on the increase. This not only impacts business viability, but the safety and security of staff and customers,” he said.
Along with rising rates of theft, Liquor Stores Association of Western Australia (LSAWA) CEO Peter Peck is concerned about an escalation in violent altercations.
“Unless something is done, it’s only a matter of time before someone gets seriously injured, whether it be the proprietor or the offender,” he said.
The true value of a stolen item is much higher than the individual item’s price, as a retailer need to recoup the loss. Paul Heilman, Director of Drinks HQ, referred to an equation by inventory management specialist Jon Schreibfeder, which calculates how much stock needs to be sold for the profit to cover the loss.
“On the ATO website, you will find historical benchmarks on profitability of liquor stores. It’ll scare you: it’s only four per cent. Even if EBITDA was six per cent, in the middle of the scale, if someone stole a $45 bottle of vodka, I would have to generate $750 in sales to pay for that bottle of vodka,” he said.
New prevention strategies
Retailers are implementing a number of strategies to address retail theft, such as Ashcroft’s IGA Dubbo, which has gained popularity due to its unique response of posting security footage of offenders with humorous captions on its Facebook page. A recent post featured a video of someone taking a single UDL can from a box, with the caption: “Winners are out and about. UDL 10 packs available. No, wait, nine packs available.”
Sam Cufone, owner of Parafield Airport Liquor Store in north Adelaide, said that it is especially difficult to address theft in stores with a large footprint.
“From our point of view, we’re becoming more and more vigilant, and rostering enough staff that we can keep our eyes anywhere and everywhere.
“I think we’re hurt by the big chains, who might put a security guard on the door, but don’t ever challenge people once they’ve stolen. That almost becomes the industry standard, and we as an industry start to look soft. Never in a million years will I let someone walk out from my store. I have no issue telling someone to open their bag and making them feel uncomfortable,” he said.
Heilman is in the process of rolling out Veesion across his stores, an AI pattern recognition software. Veesion analyses security footage in real time for suspicious behaviour or potential thefts, and alerts staff.
“There are two sets of people who steal. You have the brazen people who grab it and run, but more often you’ve got people who are putting things in trolleys, sticking a single RTD in their pocket, and coming to the counter to buy something and take suspicion away from them.
“Veesion alerts the staff that there’s been something suspicious by sending a grab of the CCTV footage within seconds of the event. They can view the footage and if it is a potential theft scenario, they can approach the customer. My plan would be to approach with a shopping basket and the device, and say, ‘The video suggests that you’ve put something in your pocket. Would you rather put it in the basket?’” Heilman said.
Heilman identified three key benefits of the software. Firstly, any potential offenders who are approached by staff know that the stores are equipped with this software, which acts as a deterrent from stealing from the store in future. Veesion also provides data about particular pain points in the store where theft is more common, which can be restructured to remove blind spots or move particularly desirable products.
“The third benefit of Veesion is that we are getting in front of stocktake. If slower moving lines have been stolen, we often wouldn’t find that out until the next departmental stocktake. Best practice is to do rotating, ongoing stocktake but still it could be months between stocktakes for a specific department. This way, we won’t end up with an empty shelf, as no one’s served by that. The supplier hasn’t got stock on the shelf, we haven’t got anything there to sell, and the customer doesn’t have anything to buy,” Heilman said.
Despite these innovative and effective loss prevention methods, LSAWA’s Peck pointed out that individual retailers cannot address the broader issue of retail theft.
“It’s not the makeup of the proprietor that is causing people to come in to steal, it’s because of a breakdown in society. The government is supposed to keep society stuck together, but the problem we have is that they’re not doing their job. Instead, people are deciding that there’s no consequences to stealing, so they’re just going to do whatever they want to do,” he said.
Responses to theft
Currently, once a theft has occurred, reporting the theft is one of the only responses that retailers have.
Parade Cellars’ Ashley Sinclair said that despite the limited options for recourse, making reports has reduced repeat offences at his Adelaide store.
“Unfortunately, SA laws do not provide retailers with many avenues of response to theft. The only response available to us is to report it to the police. As such, we’ve made a team decision to report every single theft to the SAPOL intelligence centre with CCTV footage and a staff member report. Our experience is that most of these thieves are known to police, so they’ll eventually be pulled into court.
“Even if charges don’t go through, the thieves quickly work out that it’s a huge inconvenience if every time they steal from us if they wind up in court. We’ve managed to reduce the incidence of repeat offences from specific individuals, but we have found that during the cost-of-living crisis the number of new individuals attempting theft has increased,” he said.
Unfortunately, Peck does not see enough perpetrators experiencing consequences of their retail theft.
“Reporting it is important because then people know that this happens. But when you report a crime, even if the police turn up, if they end up catching the person that did it, and if the case makes it to court, it falls over that point. The justice system doesn’t care.
“The answer is not locking these people up. It doesn’t work. When they commit their first offence, we need to drag them in front of court and address the addiction or psychiatrically assess them for behavioural issues. We need to try to turn people around instead of just putting them in gaol, where they can learn better ways to steal and come out and become a problem again,” he said.
In addition, there is not enough support for retailers who have suffered theft-related losses.
“I have some members in rural WA who are uninsurable. Crime is not their fault. Crime is something that the government is supposed to have under control. I’d like to see the government offer these people the ability to insure their businesses, so that when someone does drive a truck through their front door and cause $100,000 in structural damage just to steal a carton of beer, they can make an insurance claim,” Peck said.
Retail Drinks Australia has been supporting retailers with its Safe to Serve initiative.
“Safe to Serve aims to make retail liquor stores safe, secure, and respectful environments by empowering and equipping liquor retailers with the tools and resources to target-harden their stores and manage safety and security challenges more effectively,” Waters said.
Ultimately, Peck called for greater government intervention to address the root causes of retail theft and to rehabilitate offenders.
“At the end of the day, all governments need to pull their heads in and understand that there are victims to this. There are retailers that are hurting, and we pay our taxes to make sure these kinds of things don’t happen.”