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Light-fingered customers
At its full-year results in August, investors had taken fright at a significant rise in the
cost of theft to the company. But Coles’ controversial deployment of some of the latest anti-theft technologies has clearly had an immediate impact.
When supermarkets started introducing self-service checkouts, a rise in shoplifting was more than offset by the reduction in staffing costs. But a surge in theft attributed to cost-of-living pressures saw Coles’ “loss” balloon by 20 per cent in the last financial year.
Loss is the term used by Coles to describe the financial impact of shoplifting and throwing away spoiled fresh food.
Last Tuesday, it revealed that the basis point measure for theft, which had been at 70-80 at full-year results, has been pulled back markedly to 50. Its digital revenue also performed well, with e-commerce revenue up 29 per cent on the previous corresponding period and 15 per cent for its liquor sales.
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Having now turned into a tailwind through the second half of 2024, we expect this [theft] largely to normalise through 2024-25, providing greater than $150 million of EBIT tailwind,” Jarden analyst Ben Gilbert wrote in a note following the earnings.
The most obvious of the new anti-theft solutions was the installation of security gates at the exits of some stores, to prevent shoppers walking out without paying for their items.
It also included AI-enabled surveillance cameras that track customers around stores, skip scan monitoring to detect when items haven’t been scanned at the self-service checkout and fog machines that fill stores with a smoke if they are broken into.
Skip scan has been rolled out in 305 stores, and smart gates are in 267 Coles supermarkets, with them being progressively deployed into more of the worst affected stores.