Co-op has introduced artificial intelligence technology to identify individuals carrying concealed weapons or stolen goods, following a nearly 20% increase in losses from theft and fraud, which reached £40 million in the first half of the year. This innovative technology, currently in a trial phase, is also capable of detecting physical assaults on staff and alerting a central monitoring station managed by Mitie for immediate support, as reported by The Guardian.
Despite a surge in shoplifting, Co-op has returned to profitability this week. The retailer has invested £18 million this year in measures to safeguard its food business employees, including the deployment of body-worn cameras and reinforced kiosks.
The AI technology has been installed in 14 stores to monitor for unpaid items and concealed weapons. According to Matt Hood, Co-op’s food managing director, retail crime cost the company £70 million last year.
The company reported a 44% increase in incidents of shoplifting, abuse, violence, and anti-social behavior last year, averaging 1,000 incidents daily. Hood emphasized the severe impact on staff, stating, “Last year, we faced approximately £70 million in losses due to the retail crime epidemic. However, the true cost is the physical and mental well-being of our colleagues, as well as the goods stolen from our shelves.”
Hood highlighted that every day, four employees are attacked, and 116 are seriously abused. His comments come as shoplifting offenses across England and Wales reached a 20-year high, with over 400,000 incidents recorded by police in the year leading up to September 2023, a 32% increase from the previous year.
Hood also noted that police failed to respond to 79% of incidents last year where a criminal was detained. “We are fully committed to addressing this issue and ensuring our colleagues’ safety, having spent over £200 million on security measures in recent years. However, as an industry, we cannot solve this problem alone.”
In a recent King’s speech, it was announced that attacking or abusing a shopworker will become a standalone offense, a move welcomed by both Co-op and Tesco. Chief Executive Shirine Khoury-Haq expressed satisfaction with the government’s plan to change the law but urged for its swift implementation
The rise in retail crime, as highlighted by Co-op’s recent experiences, can have several implications for HMRC (Her Majesty’s Revenue and Customs):
- Reduced Tax Revenue: Retail theft directly impacts a company’s revenue. When goods are stolen, the retailer loses potential sales, which in turn reduces the amount of VAT (Value Added Tax) collected. This decrease in VAT revenue means less money for HMRC.
- Increased Costs for Businesses: As businesses like Co-op invest heavily in security measures (e.g., AI technology, body-worn cameras, fortified kiosks), these costs can reduce their overall profitability. Lower profits mean less corporation tax paid to HMRC.
- Economic Impact: High levels of retail crime can deter investment in the retail sector. If businesses perceive the environment as unsafe or unprofitable, they may be less likely to expand or invest in new stores. This can lead to fewer jobs and less economic activity, ultimately reducing income tax and National Insurance contributions collected by HMRC.
- Administrative Burden: Increased crime rates can lead to more administrative work for businesses as they deal with insurance claims, police reports, and internal investigations. This additional burden can divert resources away from productive activities that generate taxable income.
- Impact on Consumer Prices: To offset losses from theft, retailers might increase prices. Higher prices can reduce consumer spending, which in turn affects the overall economy and the amount of VAT collected.
Overall, the rise in retail crime not only affects businesses and their employees but also has broader economic implications that can impact HMRC’s ability to collect taxes efficiently. Addressing this issue is crucial for maintaining a healthy retail sector and ensuring stable tax revenues.