Retail Loss Prevention Expertise and Research

Enabling the Retail Sector to Sell More and Lose Less

Building Capability to Remove the Shrink that is not Shrink

Nearly every loss prevention leader can recite an example of shrink caused by an upstream system failure, beyond the control of the store leader. These famous incidents, often are at such scale that they become legendary in status. However, they are often discovered by chance with the "fix" being retrospective. But there is a different way, and our working group recently learnt from one major grocery retailer in the group who over two decades had developed a proactive and intentional approach to detect, remove and reallocate the shrink that is not really shrink, while at the same time, "teaching" their business, how to prevent the upstream shrink, that is not really shrink! In their presentation, we first of all learnt about the context and background to this investment in a dedicated "shrink not shrink" capability and that the initial urgency, and business case for this work was to increase the accountability of store leadership to the shrink number, by removing from their shrink number, the upstream errors outside of their control. Looked at from another angle, the need for this capability investment in a team, now circa 8 FTE, was driven by a desire and ambition to NOT fire great store managers for a missed shrink number. But first, back to basics, what did this retailer define as the shrink that is not shrink? For them, it was defined as any unknown loss not caused by theft, that included issues like incorrect case sizes, barcode mismatches, and inventory inaccuracies. How big was this problem? At the start of their journey, nearly two decades ago, it was often the case that for any set of audit "counts" over 40% of that loss result could be made up of losses [and gains] created upstream by those other than the store leader, buyers, vendors, logistics, POS systems, invoicing, etc. Their journey started with the appointment of a single leader, dedicated to this work and an integral part of the loss prevention team. And it was the skill sets of this individual that were critical to the success of this programme. The leader they appointed, had a background in stores and supply chain but most of all, they were constantly curious in nature, they were excellent with data and to finding imaginative new ways, often without sophisticated analytical tools, to find the exceptions and the odd things in the data that did not "add up" and above all, a tenacity to chase down the root causes and the fixes required to prevent, recover or re-direct the losses to other parts of the P&L and away from shrink. The journey, over at least two decades began by looking at data from sales-based ordering and perpetual inventory systems, where the shrink data was rudimentary, with major gaps such as unaccounted negative inventory and unmatched barcodes. Over time, and with more frequent inventory counts, they developed a robust set of shrink analytics functions, enabling detailed tracking by product, store, and day. This evolution laid the foundation for identifying and correcting systemic issues were inflating the shrink figures. As their programme evolved, they began to expose several recurring issues that were contributing to the shrink that is not shrink: - Case Size Errors: Discrepancies between expected and actual quantities received. - Variable Weight Products: Inaccurate weight tracking, especially in fresh counters. - Promotional Pricing Manipulation: Retail price-based shrink calculations allowed stores to influence shrink outcomes. - Evaporation and Waste: Water loss in meat products and untracked ingredient usage in counters like pizza bars. - System Integration Failures: New technologies (e.g., RFID) and legacy systems often don’t communicate effectively, leading to inventory inaccuracies. - Incorrect Transfers and Returns: Misallocated stock movements, such as to colleague rooms or cost centres, distort shrink data. To detect these anomalies, the case study retailer now employs a multi-layered data strategy that includes: - Products of Interest Report: Highlights items with unusual shrink patterns compared to their subgroup norms. - Weekly Reviews: Regular analysis of out-of-shape products, stock cycles, and subgroup trends. - Real-Time Data Access: Tools like Alteryx automate data extraction and manipulation, enabling faster root cause analysis. - Cross-Functional Collaboration: Teams across finance, supply chain, commercial, and stores work together to resolve identified issues. Examples include identifying incorrect case sizes for After Eight chocolates and barcode mismatches for Malteser bunnies, both of which led to inventory gains or losses that were not theft-related. By isolating process-related shrink, store leaders are now more empowered to focus on controllable factors. This clarity improves accountability, supports better decision-making, and enhances customer satisfaction through improved availability. Accurate shrink data also informs budgeting, product ranging, and security investments. So, what did retailers learn from this case study? First, this retailers experience underscores again that shrink is not solely a security issue, it’s a data and process challenge. To address the shrink that is not shrink, retailers could invest in a dedicated leader, along with data analytics, to foster cross-functional collaboration, and continuously adapt to technological changes. By doing so, they can significantly reduce non-theft shrink, improve operational efficiency, and enhance the overall customer experience. How would you describe how your business addresses this work? Do you have an intentional strategy, with targets, etc, and a dedicated FTE or even a team? We also learnt that the shrink that is not shrink in this retailer is now believed to account for less than 10% of the shrink number, what would be your number? Their small dedicated team regularly discover and remove from the raw shrink numbers over tens of millions of euros every year that would otherwise have gone onto the shrink line. What could be the size of the prize for your business? Finally, the team from this case study shared that they are constantly learning and continue to find new innovative ways to detect and manage out the shrink that is not shrink, helping store leaders focus on what they can control. For your business, what could be the benefits and impact to your business of a store leadership team taking more accountability for their shrink number? If you are a retailer and would like the full recording of this meeting, please email me at colin@ecrloss.com

REVEALED: The €90 billion hidden cost of managing unsold and surplus food

New research for ECR Retail Loss finds the extra cost of managing unsold and surplus food amounts to 1.8% of sales - enough to wipe out profits. Our new report reveals that the ‘hidden costs’ to retailers associated with managing unsold and surplus food amounts to €90bn a year. If retailers could simply halve these costs buried inside their P&L’s, most could grow their profits by more than 20%*. Exploring the True Cost of Unsold Food in Retail, led by Professor Lisa Jack and her team at the University of Portsmouth, finds that the additional costs of dealing with unsold food - such as staff time, markdowns, redistribution and disposal - can be as much as 1.8% of sales revenue. Separate analysis by ECR Retail Loss estimates the global fresh produce market at more than €5 trillion+ pa**. Suggesting the total global hidden costs of managing surplus and unsold food are €90bn+ every year. For many retailers this extra 1.8% of hidden costs could be the difference between profit and loss - where profits can sometimes be 1-2%. “Retailers often assume they’ve already accounted for waste, but our model shows many are missing critical hidden costs,” says Professor Jack. “Most only track the obvious, like markdowns or checking expiry dates, but the real picture includes staff time, costs of exit schemes, theft and unrecorded losses. The true costs are higher than many retailers assume.” Shining a light on the hidden costs of food waste The data, based on detailed case studies with four UK and EU retailers, was used to create an interactive model. The model uses European figures, but the principles apply globally. Retailers who would like access to the model should contact ECR Retail Loss directly. The study modelled: Exit routes for unsold food including markdowns, staff shops, donations, animal feed, and incineration Cost breakdowns for 1,000 SKUs, incorporating staff time, consumables, transport and fees Multiple retail scenarios – from best-case to worst-case The model showed that while most supermarkets successfully sell more than 97% of their food inventory, it’s the complex and costly processes behind the final 3% that are often overlooked. Retailers face a tough balancing act to minimise waste while maintaining on-shelf availability. The report calls for a shift in mindset - to treat food waste as a core financial challenge rather than a sustainability issue alone. By integrating loss prevention strategies with supply chain and pricing decisions, supermarkets can reduce waste without sacrificing profitability. “Even with redistribution schemes in place, handling unsold food takes time, money and management focus,” explains Professor Jack. “And ironically, doing the right thing like donating to charity or recycling for animal feed sometimes carries more cost than landfill.” The report warns that siloed reporting, poor data integration, and incentives not to record losses all mask the real cost of food waste. It also raises concerns about the risks of greenwashing, with major variations in how food waste is defined and reported across the industry. A new mindset: food waste as a margin risk Professor Jack calls for a shift from seeing food waste as purely a sustainability issue, to treating it as a core financial risk. The report sets out practical ways for retailers to act: Cross-functional collaboration: breaking down silos between CSR, finance, buying, and store ops Smarter markdowns: using AI-driven pricing to minimise waste and protect margin Improved tracking systems: to reduce unexplained losses and ensure tax compliance Clearer performance indicators: aligning waste KPIs with profit goals John Fonteijn, Chair of ECR Retail Loss, said: “Retailers need to understand that food waste is not just an ethical or environmental issue - it’s a significant financial drain. “Supermarkets all around the world need to pay much more attention to the quantifiable extra costs associated with managing food waste effectively. “This report provides the tools to measure the impact and make better decisions that benefit both business and sustainability.” Download the full report You can read or download the full report from here: Exploring the True Cost of Unsold Food in Retail. --------------------------------------------------------------- *The 20% growth is based on typical UK operating profits of 3%. Half of 1.8% is 0.9% 0.9% as a proportion of 3% is 30%. We use 20% to be prudent **The €5 trillion estimate for the global fresh produce market is based on publicly available data from the Food and Agriculture Organization of the United Nations (FAO), Our World in Data, and the World Bank, applying established economic models used by the USDA and FAO to estimate farm-to-retail value across the global food system. FAO estimates the gross value of global agricultural production at farm-gate level to be more than USD 4.0 trillion in 2023 (FAO Highlights; Our World in Data). Using the USDA’s “food dollar” model, which estimates that farm-gate production typically accounts for 20% of total consumer food spend, this implies a global food retail value of approximately USD 20 trillion. Fresh produce (fruits, vegetables, fresh meat, dairy, fish) consistently represents around 30–35% of total food retail spend in major markets, which equates to a fresh produce market size of USD 6–7 trillion globally. Applying a July 2025 average exchange rate of $1: €0.855 (Exchange-Rates.org), this corresponds to €5.1–€6.0 trillion in current terms. This model draws from: FAO/UN and World Bank macroeconomic analysis of food system structure and market value (World Bank), Agricultural output data from FAOSTAT and Our World in Data, and Established farm-to-retail mark-up ratios applied globally by USDA and FAO economists. Commercial estimates from market analysts offer more conservative, but complementary, figures: Zion Market Research estimated the global fresh food market at USD 3.1 trillion in 2023, equivalent to approximately €2.65 trillion. – Source: Zion Market Research Towards FnB, a specialist F&B market research firm, estimated the global fresh produce market at USD 3.5 trillion in 2024 (approx. €3.0 trillion). – Source: Towards FnB While commercial estimates may apply stricter category definitions or exclude informal/wholesale markets, the €5 trillion figure reflects a comprehensive, system-wide valuation based on globally accepted agricultural economic models.

Calculating Your Staff Dishonesty Detection Gap: New Excel Tool for Retailers

In her new report for ECR Retail Loss, click here, Professor Emmeline Taylor introduces the internal theft ‘detection gap’ which she refers to as the difference between the estimated amount of theft committed by employees and the known amount that is detected or recorded by the retailer. It is widely acknowledged that most internal theft goes undetected or is only discovered – and actioned - after significant losses have occurred. We provide here a simple excel tool that we hope can help loss prevention leaders explore their own detection gap that can help shape, inform and articulate the choices and measures the business might want to adopt to influence and prevent staff dishonesty. The excel form, downloadable below, is a simple formula. It asks you the following questions: How many stores do you operate? (example, 100) What is the value of your total sales per year from these stores? (example, €100 million) What is your unexplained / loss rate (typically valued at cost over retail sales? (example: 1.5%) What is your best estimate on the percentage attributable to staff dishonesty (example, 33%) How many staff dishonesty cases do you close per year? (example, 200) What is the average value of a staff dishonesty case? (example $200) From these questions, the excel tool will then calculate your detection gap, which in this example, using the above data points, would be 92%. CLICK HERE FOR THE EXCEL MODEL The research paper makes the case that communications strategies can be an effective way to close the gap and help retail businesses' prevent and reduces losses associated with staff dishonesty. Sharing with your business leaders the difference between what the loss prevention team are currently able to detect and close, with the possible larger universe, could be one way to promote the case for change and for more efforts to prevent staff dishonesty, especially communications.

Managing Trolley Losses: Retail Best Practices

In USA, over 2 million shopping carts are lost a year. What are the best ways to track and monitor this problem? What are the root causes? What are the interventions that can make the biggest differences? What could be some of the "out of the box" future innovations to deliver a paradigm shift in the loss rate? These were the open questions the working group sought to answer. Here is a summary of the discussion. The Scale of the Problem Retailers in the group reported annual trolley losses ranging from 3% to over 35%, depending on location and store type. For example, one UK retailers loses between 4,000 and 5,000 trolleys annually, costing approximately £500,000. While, a USA retailer reported losing over 50,000 carts in a year—about 11% of its fleet—translating to a potential $20 million replacement cost. All retailers reported that a clear pareto, for example, for one retailer, 25% of the stores represented over 70% of the losses underscoring the magnitude of the issue, especially in urban and high-theft areas. Root Causes of Trolley Loss The causes of trolley loss are multifaceted: Theft for Scrap Metal: Rising steel prices have made metal trolleys attractive targets for theft, often by organized groups using unmarked vans. Customer Entitlement: In some regions, customers feel entitled to take trolleys home, leading to widespread abandonment in residential areas. Coin locking potentially helps increase this feeling of entitlement. Homelessness and Anti-Social Behaviour: Trolleys are frequently used by unhoused individuals or vandalised by youths, especially in urban centres. Operational Gaps: Inconsistent counting, lack of accountability, and limited surveillance contribute to unnoticed losses. Current Interventions and Best Practices Retailers are deploying a variety of strategies to mitigate trolley loss, focusing on prevention, accountability, and innovation. #1. Accountability and Awareness Many retailers are working to shift internal mindsets, treating trolleys as valuable assets rather than disposable tools. Education campaigns for staff and customers emphasize the cost and impact of trolley loss. Some retailers have created dedicated working groups to monitor high-loss stores and improve reporting. #2. Technology and Tracking Gatekeeper Systems: These use perimeter loops to lock trolley wheels when they leave designated areas. While effective, they are costly and unsuitable for shared or complex retail environments. Coin Locks: Still used in some regions, these encourage returns but are less effective in a cashless society. Digital Locks and Apps: Trials involving app-based unlocking systems have faced challenges with user adoption and cost. GPS and RFID: These technologies are being explored but are currently cost-prohibitive at scale. #3. Plastic vs. Metal Trolleys Plastic Trolleys: Most retailers were trialling or have trialled fully plastic trolleys to reduce scrap value. Results show significant reductions in theft, but concerns remain about durability, flammability, and recyclability. Hybrid Models: Some retailers use a mix of plastic and metal to balance cost and resilience. Recycling and Sustainability: Plastic trolleys are often made from recycled materials (e.g., milk cartons), but end-of-life recycling logistics remain a challenge. #4. Design and Deterrence Powder Coating: One retailer has successfully used green powder coating to make trolleys identifiable and less attractive to scrap dealers. Perimeter Bollards and Barriers: Physical deterrents are used in some locations to prevent trolleys from leaving premises. Customer Feedback: Retailers regularly gather in-store feedback to assess customer acceptance of new trolley designs and approaches to reducing losses. #5. Collaboration and Law Enforcement Retailers are increasingly working with local councils and police to address trolley theft, especially in areas with high homelessness or organized crime. Some are advocating for stronger enforcement of existing laws against trolley removal and better coordination with scrap yards. Moving Forward Despite the diversity of approaches, one theme is clear: there is no silver bullet. Retailers must adopt a tailored, multi-pronged strategy based on store location, customer demographics, and operational capacity. Collaboration across the industry, investment in innovation, and a cultural shift toward valuing trolleys as critical assets are essential steps forward. Retailers interested in addressing trolley loss should begin by auditing their current fleet, identifying high-risk locations, and piloting a mix of interventions. Sharing data and best practices across the sector will be key to developing scalable, cost-effective solutions. If you would like to join our working group on trolleys and other loss prevention topics, please click here and sign into our online meetings.

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ECR Retail Loss is a global collaboration between retailers, suppliers and academics, working together to better understand and manage the causes of retail loss..

Our community includes 400+ of the biggest global retailers (our current Board members are from Aholddelhaize, Nike, Next, and Tesco) alongside consumer goods manufacturers, academics and researchers. Together, we explore practical ways to reduce shrink, fraud, food waste and other preventable losses across all channels.

Through regular working group meetings, peer-led research, benchmarks and reports, we support loss prevention professionals, asset protection, store teams, and retail leaders in making smarter decisions to reduce shrink, protect assets, and meet rising expectations from customers and stakeholders.

Real world insights influence everything we do to support your teams, stores and operations. From preventing theft to improving inventory accuracy.

Our eight priority areas are set by our members.

Video in Retail: the evolving role of surveillance, AI and analytics in deterring crime
Food Waste and markdowns: reducing preventable waste and aligning shrink reduction with sustainability goals
E-commerce Loss: tackling fraud, returns abuse and delivery risk in online retail
Inventory Accuracy: why better stock data reduces shrink, improves margins and builds trust
On-Shelf Availability: ensuring products are where they should be, when customers want them
Self Checkout: balancing customer experience with effective loss prevention at SCO
RFID in Retail: using real-time data to track goods, reduce shrink, and improve replenishment
Retail Loss, Safety and Security: protecting people, products and profits in an age of rising threats

We help you sell more and lose less by tackling every major form of retail loss:

Shoplifting, employee theft, internal fraud, external threats
Returns abuse, self-checkout manipulation, operational errors
POS system mistakes, stock inaccuracies, spoilage and waste
Supplier fraud, delivery discrepancies, vandalism, and more

We share actionable strategies to prevent loss, strengthen store safety, and improve visibility across all retail operations. That includes smarter loss prevention protocols, upgraded security cameras, AI, facial recognition and POS systems, real-time RFID tracking, enhanced EAS tagging, updated policies and processes and practical training programmes.

And thanks to the funding from our research grant providers, all of our research, insights and meetings are offered to the retail industry for free.