Bud Stockwell waxes reminiscent when asked about the highly creative ways shoplifters find to steal. "We've had instances where we've seen someone pick an item off the shelf [in this instance, granola], put it in a brown bag, take it to the cash register and try to get cash back for it," he says.
Stockwell, owner of 2,200-square-foot Cornucopia Foods in Northampton, Mass., is not the only naturals retailer with stories. Shoplifters, they say, steal just about anything, from easy-to-hide body care products and supplements to huge cuts of meat.
"We have one product called 45 Minute Quick Capsules. We carry it because it can rapidly detoxify the body in cases of poisoning. But people are taking them to beat drug tests. We've found boxes empty on the shelf, so we've had to put the product under the counter," says Linda Evensen, store manager at Earthsongs Organic Health Store in Romney, W.Va.
"Shoplifters] like us for our meats," says Wally Walker, national director of loss prevention for Boulder, Colo.-based supernatural chain Wild Oats Markets. "They'll put it down their pants, in their purse, stick it in a bag, give it to their kids'."
Shoplifting, employee theft and check fraud top the list of food retailers' concerns, according to the Washington, D.C.-based Food Marketing Institute, which in August released its 2004 survey on security and loss prevention.
This year's findings show that shoplifting continues to be one of the most common types of loss generators for food retailers. Survey respondents cited an average of 22.7 known instances per store during the last year. That figure, FMI notes, is about the same as was reported in 2002 and totals about $4.5 million.
The number of employees detected stealing has actually dropped, but the average value of employee theft has increased markedly, from $452.10 per incident in 2002 to $622.90 in 2003.
And that dollar figure is probably low, Walker says.
Shrink is up, agrees Stockwell. Food shoppers' increasing use of bank cards and credit cards has made check fraud in natural foods stores less of an issue, he suggests. But for many smaller natural foods retailers, it's tough to know exactly where other losses are coming from. "Is it from employees or customers" We just don't have a handle on it," Stockwell says.
Larger retailers say they do. "Internal theft accounts for half your shrink," Walker says. "Internal theft takes its toll on every company out there. It's not that lots of employees are doing it, it's a very small number who are causing a very big problem."
Five years ago Wild Oats created a loss-prevention unit. The chain uses computerized exception-based reporting systems that pull data from point-of-sale systems. "We have an administrator on our loss-prevention staff who analyzes every front-end transaction and matches it to other employees in the same store and in other stores. We look at time, dollars, refunds, voids and other issues," Walker says.
Walker says Wild Oats also considers every one of its 9,000 employees members of the company's loss-prevention team. The unit conducts quarterly awareness training, covering deterrent strategies for shoplifting and internal theft, at every store in Wild Oats' 101-store chain.
As a result of both technology and awareness training, incidents of theft, both from within and without, have declined, Walker says.
But can the thousands of smaller natural foods retailers afford such an effort?
"Mom-and-pops would have to have upgraded register systems and controls on the front end," Walker admits. "But even if a quarter of their shrink is on the front end, they may want to upgrade a little bit."
While the FMI findings paint an appropriate overall theft picture for larger food retailers, a highly unscientific sampling shows that shoplifting and other types of theft are simply not as big a problem for the smaller stores.
It seems, in fact, the smaller the store, the less the problem.
For example, Earthsongs Organics' Evensen runs a 530-square-foot store attached to a chiropractic office. She says that while shoplifting incidents are up from last year, they aren't a measurable problem. "We're a small store and it's not easy for people to take things," she says.
"We're very fortunate," says Sue Trivett, owner of the 1,200-square-foot Health Hut in Tucson, Ariz. "We're a small store with lots of regular customers. We don't have much shoplifting."
The reasons are somewhat self-evident. Smaller stores provide fewer places for shoplifters to hide and often have a known and loyal customer base. Smaller stores also have fewer employees, so internal theft is more difficult.
Nancy Nachman-Hunt is a freelance writer and editor in Boulder, Colo. Reach her at [email protected]
Natural Foods Merchandiser volume XXV/number 10/p. 58