PROTECTIVE MEASURES

Well aware that shrink losses are eating away at profits, retailers are deploying a wide range of new security and surveillance technologies, but in many cases it's one of the older systems -- closed-circuit television -- that's still heralded as the most effective."I would rate the effectiveness of CCTV a 9.5 on a scale from one to 10," said Nick Barilla, director of loss prevention for Giant Food,

Well aware that shrink losses are eating away at profits, retailers are deploying a wide range of new security and surveillance technologies, but in many cases it's one of the older systems -- closed-circuit television -- that's still heralded as the most effective.

"I would rate the effectiveness of CCTV a 9.5 on a scale from one to 10," said Nick Barilla, director of loss prevention for Giant Food, Landover, Md. "It ends up being a time saver for us, so instead of someone watching the cashiers and customers in the front end, we can pull the tape to view any suspicious activity."

The retailer regards CCTV as a solution that is addressing the issues of shrink in its stores caused by both internal and external theft.

"CCTV is a big asset to curb employee theft along with shoplifting," Barilla said.

Brown & Cole, Ferndale, Wash., is using CCTV in its stores, as well as new stores acquired in January through its merger with Thrifty Foods, Burlington, Wash.

The retailer, which now operates 24 stores, said CCTV has proven to be effective for Brown & Cole stores, and it is already installed in 75% of the new Thrifty stores, said Larry Mount, loss prevention manager for Brown & Cole.

"Based on the Brown & Cole stores that have CCTV, we have seen a 50% reduction in shrink in the last five years by using the cameras."

He said Brown & Cole views CCTV not only as an important loss prevention tool, but also as an effective way to monitor the performance of staff and recognize those who are doing an exceptional job.

"We are trying to get our managers to see this as a management tool -- not only to see who is stealing, but also to praise associates doing a good job," he said.

Another retailer that sees the value of CCTV is Buttrey Food & Drug Stores Co., Great Falls, Mont.

The 42-store chain uses some type of closed-circuit camera system in all of its stores and intentionally makes the systems highly visible to the public to deter any undesirable activity.

"We don't hide the cameras, and if a theft takes place, or if we notice a shortage in stocks, or if we have a problem with someone, there is a good chance we have it on camera," said Bruce Roswell, loss prevention manager for Buttrey.

CCTV is only one way retailers are fighting back against shoplifting and employee theft. Some retailers are reinforcing those systems by installing electronic article surveillance technology.

Giant Food is using EAS in 35 of its 175 stores and reporting positive results.

"We are seeing a 30% reduction in shoplifting through the electronic tags," Barilla said. "We only use the tags in high-shrink stores, though we are looking to possibly use them in other stores, specifically for health and beauty aid products."

Niemann Foods, Quincy, Ill., has investigated using an EAS system, but believes far too many shoplifters know how to locate and remove the security labels, rendering the systems ineffective.

"The tags are effective at the start," said Linda Rudicil, risk manager for Niemann Foods. "However, once people figure out what the tags are and where they are located on the product, the EAS system becomes less effective. I don't expect this system to be a priority for us."

Brown & Cole's Mount said EAS has not been deployed broadly in the supermarket industry, partly because of the time-consuming process of applying the security labels. "It has been slow in penetrating the supermarket industry because right now, EAS is very labor intensive when it comes to tagging products," he said.

He added, "Our industry needs to use this more on key items, like meat and health and beauty products, to become more prevalent, though it is coming to supermarket retail -- it is just not going to happen in a big way."

Buttrey Food & Drug Co. is using EAS technology in four stores, but Roswell also has mixed feelings on the technology. He said EAS may discourage spontaneous shoplifting, but probably will not have a great impact on those who set out to steal.

"I haven't seen a major decrease in losses through EAS when comparing our inventories," he told SN.

Buttrey tags high-theft merchandise -- such as meats, cosmetics and condoms, and also those items whose value exceeds $5 -- according to Roswell.

"When we first installed the EAS system, it was a big deterrent for spur-of-the-moment shoplifters," he said. "Then we started noticing a lot of tags removed from products and left in the stores. They will not deter those with an intent to steal."

About 55% of all reported shrink stems from employee theft, and cashiers are the major offenders, according to the 1997 Supermarket Shrink Survey. To reduce that liability, many retailers are exploring automated cashier-performance monitoring systems.

According to the survey conducted by Supermarket Research Group, Centerville, Ohio, 72% of the 258 responding companies use an automated cashier-monitoring system, and reported a shrink of 1.93% as opposed to 2.32% in companies that do not use the technology.

Food Giant Supermarkets, Sikeston, Mo., uses the system to monitor items scanned through the register. All transactions are recorded, and if items are not scanned properly, this mechanism records the problem.

"Through the system, we have decreased a sweethearting problem in about seven stores," said James Bishop, director of operations for the Northern territory of Food Giant Supermarkets.

He added, "Since the system is portable, once we find a situation under control in one store, we can move the system to eliminate problems in another store." Food Giant also uses CCTV in nearly all of its 116 stores.

"If an employee is stealing from you, it is difficult to prove, but documentation reports from the point-of-sale system and video enables retailers to prove this," said Rudicil of Niemann Foods. "Though we are still exploring the concept, we expect to have more capability at our corporate office to watch a cashier or a store's front end through a camera."

Giant Food is testing various monitoring systems, but has yet to find one that meets its needs.

"We will install a system immediately if we find the right one, however several we have tested were labor intensive or not cost effective," Barilla said. "We need 175 -- one in each store would be most effective for us -- and we are working toward that goal."

Even as the supermarket industry uses technology to reduce theft, retailers still rely on the help of associates to beat the crime.

Both Brown & Cole and Giant Food have set up employee hot lines for associates to call anonymously and report internal thefts.

"If an associate sees people abusing the system, this line empowers them to take positive action," Mount said.

Giant Food's Barilla agrees. "The line helps those associates that are uncomfortable talking to the manager, or afraid to talk about someone in-house that is breaking store policy," he told SN.

Buttrey Food & Drug also believes the best way to increase loss prevention is through associates.

"We train our associates to walk the store asking customers, 'Can I help you?' We find this is a great deterrent to shoplifting," Roswell. "This helps us believe that our associates are a great source of prevention."