Supermarket Powerhouses in Australia Are Feeling the Strain of Burgeoning Retail Theft Rates.

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Government data reveals that Australia has experienced its most extreme levels of retail theft yet, posing a significant burden for Woolworths Group Ltd (WOW.AX) and Coles Group Ltd (COL.AX). 

These grocery giants are already struggling with skyrocketing supply costs and freight delays, making this issue even harder to manage.

Astonishingly, the latest figures released by the New South Wales state government showed that thefts from stores had risen an alarming 23.7 per cent in 2021-2022 alone – this is the highest year-on-year growth since records began 26 years ago. With one-third of Australia’s population residing in NSW, these statistics are especially concerning for many citizens.

January was Queensland, Australia’s most notorious month for shoplifting incidents on record, according to official police reports. The state is the third largest in the country, and its crime rate has been steadily climbing since then.

The evidence presented in the data bolsters worries that analysts and social researchers have expressed about skyrocketing living expenses – from food prices to electricity bills to mortgages – escalating criminal activity.

Last month, Woolworths and Coles – responsible for two-thirds of Australian grocery sales – noted a surge in store theft in their trading updates. It could have repercussions on the profits of both companies.

We would see a risk that continues to rise if and when we start to see an increase in unemployment and tougher economic conditions,” said Craig Woolford, a retail analyst at MST Marquee.

With supermarkets running on incredibly tight margins, even the slightest alteration in stock loss can significantly hinder profitability.”, he added. 

Supermarkets refer to goods lost due to theft, expiration, or payment errors as ‘stock losses.’ This costly inventory loss can be detrimental to a business and must be managed carefully.

During the analysts’ earnings call, Coles Chief Operating Officer Matt Swindells commented that they were seeing a surge in theft and are consequently investing in staff training and technology to address this issue.

In January, Australia’s jobless rate skyrocketed to its most elevated level since May due to nine interest rate hikes intended to curtail inflation, which is currently shy of 8%.

When high inflation and increased interest rates are present, retail theft can be expected. These economic conditions create ideal circumstances for people to steal to make ends meet.” Roger Wilkins, deputy director of the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, said. 

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