Front Lines
news/analysis
OUT FOR THE
COUNT
WHEN IT COMES TO THE
‘CRUNCH’ RETAILERS ARE
INCREASINGLY OUTSOURCING
THEIR STOCK TAKING
TAKING stock of stock taking companies want as close to chore added onto the other prevention conferences on
has become a critical tool in 100 per cent accuracy and a duties. This can skew the the subject, often joined by
fighting shrink which is why truly independent audit results as can any staff willing retailers who have
retailers are outsourcing when times get tougher.” collusion in store or indeed seen the ‘light’.
their stock taking in record “During better times when inter-store if another team One such case study is New
numbers as a direct response sales are going well some enter a quid pro quo to Look, the UK’s third largest
to the credit crunch. retailers take their eye off present the figures in a womenswear retailer which
These are the findings of their losses, but with a certain light. There has to be has almost 900 stores.
stocktaking specialist Orridge downturn in the economy trust with staff, but Head of finance Keith
which has reported record loss prevention directors are outsourcing is a guaranteed Gosling who has joined
growth in the last year, the looking to get a better way of at least 98 per cent Davies on the platform says:
biggest in its 162 year history handle on their levels of accuracy. “New Look needed a
– and it should know as it is shrink, with a view to Davies says this accuracy is specialist stocktaking
in the business of counting! arresting the loss.” critical as trading results are approach that would
Last year the company Stock taking in this context based upon their twice-yearly guarantee a consistent
which includes many of the can mean the literal lifting of findings. assessment because in today’s
UK’s and Europe’s leading merchandise by thieves and “If the stock take is out, economic climate it’s even
retailers on its books, is on internal fraudsters and, how can you rely upon the more important that we
target for a 20 per cent according to the Global trading figures given to the manage stock tightly. We
growth on 2006/7. Retail Theft Barometer, City and shareholders?” achieve this in part by
During that period the shrink cost the UK retail The credit crunch has also regular, accurate counting of
company, based in Harlow, industry £3 billion last year. brought into focus the cost- store stocks. Outsourcing
Essex, counted 693 million Across the globe the figure effectiveness of outsourcing plays a key role in our
items of stock. During the was $98 billion with the stocktaking. strategy without the cost and
current trading year that overall growth being in “It is cheaper to have a labour intensity that typifies
figure will be around 750 internal fraud. specialised company come an in-house process.”
million. “This is a huge issue and into the business and carry Davies concludes:
According to director Peter one that retailers are out the stocktake than take “Retailers need to
Davies, the record growth is increasingly concerned up staff time and wages to understand what they are
in part linked to the credit about. The traditional way of do it. It allows them to do losing and where they are
crunch as retailers need to counting is to use existing their core business – selling losing it in store or in the
have an independent staff at the store to do it or and customer service – and supply chain. They cannot
accurate picture of stock get other regional stores to for us to do ours,” says address hemorrhaging loss if
loss. stock take each other. Davies. they cannot accurately
“We see the growth in However this does not allow Davies is evangelical about measure what, where, when
items counted as a form of for independent and careful counting and frequently and why it is taking place.”
economic barometer as more counting as it is a timely addresses retail loss RF
ISSUE 2 SEPTEMBER 2008 • 05
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