Christmas; the most wonderful time of the year for families, friends, and of course, retailers! There’s no denying that the festive season is the most profitable period in the retail calendar, with Black Friday, Cyber Monday and Christmas shopping sprees all falling within the months of November and December…
But with profitable shopping months, comes busy stores, and with busy stores, comes stock loss. This can of course come from a wide range of sources, from festive shoplifters trying their luck to simple human error.
No matter the source of your loss, a loss is a loss, so where does stock commonly get lost at this time of the year?
Shoplifting
Shoplifting has always been a huge concern for high street retailers, and in the last year alone incidents of shoplifting and theft have shot up by a massive 25%, costing the British economy an estimated £1.3 billion in the past 12 months.
These figures represent the highest levels since records began and those are only the instances we know about! Sadly, more and more people are struggling to pay bills, shop for essentials and support their families – instead choosing to steal from shops in increasingly clever ways during busy periods.
Regular stocktaking is the ultimate way to identify if you’ve got a shoplifting problem before working towards nipping it in the festive bud.
Employee Theft
Not limited to chancers, organised criminal gangs and seasoned thieves, shoplifting can also occur internally with seemingly trusted members of staff.
In fact, research conducted by Statista shows that in 2022/23, there were more than 6.5k incidents of theft by an employee reported in England and Wales, which is up 16% vs the previous year.
Just like shoplifting on the shop floor, effective stocktaking should help you identify where your stock is being lost, way before it becomes a bigger problem.
Distribution
Distribution and supply chains come under stress at this time of the year, and 2023 is no different thanks to delivery strikes, a shortage in lorry drivers and logistical issues caused by external factors overseas.
When timings are under pressure, things get delayed, undelivered, or simply lost in transit, jeopardising your margins and customer satisfaction (and loyalty) along the way.
Returns and refunds
No business likes returns; it means refunds, additional admin and time. So it’s not great news that according to The Retail Bulletin, UK return rates in 2022 were 21% higher than the year before. There could be several reasons for this, but one of the most common is the increasing number of online sales of retail items; if you’ve not yet seen it in the flesh, you’re far more likely to send it back, due to sizing, feel, fit etc.
With that in mind, it’s not surprising that the most common items likely to be returned, according to a poll conducted by The Independent, is clothing (jeans), closely followed by electrical goods like coffee machines/tablets, followed by children’s toys.
But where are you going to lose your stock? Well, think of it this way, if your standard item makes one journey in its life (from the store to the customer), a return immediately doubles that journey (adding a visit back to the store at the end).
Where there’s a journey, there’s a chance it’s going to get lost, and that’s before we even get it back, log it and add it back into inventory.
Just like the other causes of loss we’ve mentioned, effective stocktaking can quickly identify issues with your returns systems, and help you avoid miss-counting.
Pricing and paperwork errors
In 2023, Black Friday has contributed more than £3 billion to the UK economy, but whilst mega sales and frantic marketing campaigns can lead to goods flying off the shelves – they can also lead to stock and profit loss if not priced correctly.
This issue, of course, can only worsen as Black Friday sales begin earlier in the month with each year that passes.
How can stocktaking help to remedy these issues during the busy festive retail period?
Stocktaking helps you to understand what stock you’ve got, where it is and where it’s gone missing.
When it comes to stock loss at Christmas, identifying where items are disappearing from your process and to what scale, means that you can make effective decisions on how to fix and remedy the problem before it gets out of hand.
The average retailer will be suffering stock losses of 2% due to a combination of all the aforementioned issues, so can you afford to discover where yours is going?
For more information on how our experienced stocktaking team can help your business, please give us a call on 01637 874609 or email info@abacusvaluers.co.uk where we’ll be happy to answer any questions you may have.
