UK supermarket shares experience in tackling retail loss

UK supermarket shares experience in tackling retail loss

UK supermarket retailer Sainsbury shares its experiences in dealing with retail loss. The retailer overhauled its complicated alarm system with a standardized alarm system consisting of Honeywell Security alarm panels at its 558 stores during late 1990s. The system was installed by security systems service provider SSS Management Services.

Shrinkage through theft has been well documented as being an area of major concern for all retailers, with estimated losses industry wide close to US$3.12 billion (£2 billion) in the UK over the past 12 months. One of the UK's leading supermarket chains Sainsbury's, with an estate of 558 stores and 240 petrol filling stations (PFS), admits to suffering losses in line with average figures for the retail industry.
Sainsbury's Technical Security Specialist Ray Waddington explains that known and unknown losses need to be clearly defined. Shrinkage is a combination of both kinds and is estimated at millions of pounds. Waddington identifies three of the main areas for known losses as: shoplifting, burglary and robbery. Traditionally shop lifters steal high value consumables such as spirits, champagne salmon, meat, or portable items such as razor blades, cosmetics and others. Burglars typically target cash, cigarettes and spirits, whilst robbers make attacks on the ATMs or cash rooms.

As part of the risk prevention measures, criminal analysis reports are compiled noting incidents throughout the stores. Specific problem areas are highlighted enabling Waddington and colleagues to refine their security measures according to the findings. Burglars attack dressed in black and wearing balaclavas, which makes them extremely difficult to identify. Even so, video surveillance systems can provide valuable evidence that may be used in court. “Most of the crime is drug fuelled,” said Waddington. “We stock expensive wines that are never taken, and I am amazed how often burglars will steal branded scotch, rather than malt!”
Prior to Waddington's arrival, Sainsbury's used as many as eight contractors working independently, installing different equipment to varying standards. The alarm systems had become complicated to the extent that only a handful of installers were qualified or experienced enough to install or maintain them. In 1998, realizing it was time for a change; Waddington researched the market for an alternative alarm system and selected the Honeywell Security control panel (then known as Ademco Microtech). National Accounts Manager Douglas Waddington introduced the alarm system to Sainsbury's and quickly arranged training sessions for the operators and store managers. The system was already established as the industry standard, and became the preferred choice of alarm panel to be installed throughout the supermarket chain. “The security alarm system is operated by store managers and staff so it needs to be user friendly and consistent across all stores,” said Waddington. Waddington uses the term security alarm system rather than ‘intruder alarm', because, he explains: “If the fire doors open – we want to know about it. If the cash office, which could hold anything up to half a million pounds, is under attack – we need to know about it as soon as the incident occurs.”
During trading hours, each store's management team takes the necessary action whenever an alarm is activated. Intelligent speakers provide a specific message, to inform staff that there is a security alert without raising any concern to the customers. Most stores will have three keypads, located on the sales floor and in the general office.

Response management for all alarms, including the fire doors, panic alarms, cash office and ATM's are managed by SSS Management Services at their Communications Center. “Rarely do we need response, but when we do, we need to manage the response quickly and check for false alarms,” said Waddington. As specialists in the retail sector, SSS's main roles are to filter out false alarms from genuine alarm activations and to provide management information on all alarm activations. SSS filters 98 percent of false alarms at Sainsbury's. As part of the management information SSS provides detailed reports regarding conditions that cause the false alarms to occur, which could be due to movement, changes in temperature, human error at setting or un-setting the keypad, or a fault with the alarm detector.

Sainsbury's takes a responsible approach towards the DD243 standard and police response to alarms. “The police want the security industry to police itself,” explained Waddington. “I support the principle of DD243, because it seeks to guarantee that when the police are called out there is a genuine alarm and reason for the call.” Duncan Freeman is the senior project manager at SSS Management Services and makes up part of the team responsible for the Sainsbury's account. “Even though we have introduced digital recording mediums in to Sainsbury's, we recently managed to shave $7,791 of the cost of a video surveillance installation,” said Freeman.

As a systems service provider SSS is keen on integration, however Sainsbury's have few sites with integrated systems as Waddington reports there has not been a growing need for it, nor a business case to recommend it. In some stores the alarm systems are integrated with video surveillance, so that for example, if a fire door is opened the alarm activates and the camera automatically pans around to that area to record the scene.

Until recently one escape route for shoplifters would have been through one of the fire doors. Waddington says: “recent initiatives have put a stop to this. As well as being alarmed, the fire doors are now fitted with maglocks, keeping the doors locked at all times except when there is a genuine fire alarm condition.” Safety for customers always remains a priority and the doors will open in an emergency situation. Crime prevention initiatives like these are shared with other retailers.
To reduce losses in the PFS, Sainsbury's have installed smoke devices, from Protect, amongst others. These machines are triggered upon alarm activation and in less than a minute they fill the petrol station with a thick smoke, making it impossible for the burglars to see what they are doing. This is a positive step towards reduction of losses as well as damage. “To date, we've have never had a repeat attack where smoke has activated during a PFS burglary,” said Waddington. “Once the smoke activates the burglars are off and what's great is that the smoke doesn't damage the goods.”

In store the cigarette kiosks have also been given a makeover and now are more like a garrison, ready to withstand attack. There is a concealed detector, and staff can configure local alarms to fully set or part set the system as required. ATM's are an attractive target too and various initiatives are employed to reduce the risks, ranging from alarms, ram raid bollards and video surveillance. Warehouses are under similar threat from burglars. All goods at risk from theft are protected by the alarm system, as Waddington puts it: “It is a managed risk.” The roof space is a vulnerable area and so immense that it is not the easiest place to alarm. However, additional systems are employed in specific and back up areas. Colleague theft is another area of major concern, usually in the form of cash loss. Waddington and his colleagues are constantly reviewing and introducing new initiatives such as covert track cameras to monitor cash handling at the tills, striving to minimize all problem areas.

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