Crime Spree Takes Bite out of Major Supermarket Profits

Woolworths store in Sydney, Australia on Aug. 25, 2016. Peter ParksAFP via Getty Images

Major Australian supermarkets have witnessed a significant spike in thefts that have cut into the companies’ profits.

Woolworths Group reported a 4.6 percent increase in its fiscal 2023 net profit to $1.62 billion (US$1.04 billion) from $1.55 billion, noting that stock loss from theft and investment in its Everyday Rewards program partly offset its gross margin growth.

“To address rising stock loss, Scan Assist technology to support accurate scanning has been rolled out to 474 supermarkets by the end of the year,” the company said in a security filing on Aug. 23.

“There is an element of stock adjustments in our stores which the vast majority of them probably are related to people taking items and not paying for them ... it has spiked in the last year,” Woolworths CEO Brad Banducci said in an earnings call on the same day.

“In the time of COVID, a lot of these types of activities disappear. Unfortunately, they have come back. We need to work hard to make sure they don’t get out of control, but it’s not a new phenomenon, but it has emerged again back in the last year.”

Woolworths said its sales grew by 5.7 percent to $64.29 billion from $60.85 billion. Its board of directors declared a fully-franked final dividend per share of $0.58, up 9.4 percent from $0.53.

Coles Reports 20 Percent Increase in Stock Loss

Woolworths’ theft revelation came a day after its rival Coles Group said that its total stock loss increased by 20 percent from last year pointing to crime and theft.

“We have also seen an increase in the organised crime side of stock loss as well, which is more coordinated and tends to focus on products in non-food areas,” Coles CEO Leah Wecket said in an earnings call.

While acknowledging that the crime wave remains a headwind, Coles reported a 4.8 percent growth in net profit to $1.10 billion from $1.05 billion as its sales revenue climbed 5.3 percent to $41.47 billion from $39.37 billion. Its board declared a final dividend of $0.30, the same as the previous year.

Aldi, a privately-held supermarket company and third-largest supermarket player in Australia emphasised the importance of CCTV to help combat theft.

“We have CCTV in place across all our stores as a security measure to ensure the safety of our customers and employees, and also to monitor for theft,” an Aldi spokesperson said in an email to The Epoch Times.

Victoria Says Crime Rates Down, NSW Says Reporting Has Increased

Joel Dwyer, Victoria Police media manager, said that retail theft cases rose from the previous two years, but remain almost 15 percent below pre-pandemic levels.

The Victoria Police recorded 22,071 offences of stealing from a retail store in the 12 months to March 2023, up from 18,485 in 2022 and 18,146 in 2021.

“Based on my discussions with our analysts; we don’t have information that retail theft is worse than pre-COVID. As such, it would be impossible to comment with any confidence this is linked to issues such as cost-of-living pressures,” Mr. Dwyer told The Epoch Times.

“The only thing we can say with confidence is it’s increased from the pandemic, but that’s completely to be expected given retail closures.”

Mr. Dwyer noted that Victoria Police continuously liaise with retailers around crime and public safety matters and provide crime prevention advice to help protect their businesses.

Meanwhile, the New South Wales Police attributed the increase in reporting of theft cases to the use of CCTVs in establishments.

“Anecdotal evidence suggests that there has been an increase in reporting of retail theft offences as a result of CCTV,” a NSW Police spokesperson said while noting the police force’s efforts to punish criminals.

“Retail theft continues to cost the industry billions of dollars every year, which is why NSW Police remain committed to cracking down on those who attempt to take goods without paying for them, this sort of criminal behaviour will not be tolerated.”