Your Retail Sales Are Fine. Your Profits Aren't. Here's Why.

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Profit protection without killing the joy. We're talking about something that might sound rather dry at first, margin, stop, loss and risk.

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CLARE: But the truth is, this stuff is the difference between surviving and thriving. Welcome back to Retail Reckoning.

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CLARE: I'm Clare Bailey, the retail champion, and today we're talking about something that isn't necessarily top of everybody's list, but it's something that can make a real difference and turn sales into profits.

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CLARE: So joining me today is Graeme Sharp, one of the associate consultants with Retail Champion and also founder of Sharper Margins.

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CLARE: Graeme's been behind the curtains of so many different retail businesses over the years, and he knows where the real leaks happen to your profit.

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GRAEME: Thanks Clare. Happy to show people that protecting profit doesn't have to be scary or boring.

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CLARE: When people hear things like loss prevention, don't they immediately switch off and just think it's about security guards and shoplifters?

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CLARE: So how do you have those conversations with retailers to make it more strategic?

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GRAEME: Loss prevention has evolved over the years from security to loss prevention, and more recently profit protection and risk.

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GRAEME: People hear the words loss prevention and generally panic, think it's gonna cost them money or think it's gonna get them into trouble.

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GRAEME: In reality, I can't recall a time when the retail sector has been so challenged.

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GRAEME: Profits are being squeezed, increases in operating costs, payroll, all impact profitability.

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GRAEME: Add to this unprecedented levels of retail crime and you have a near perfect storm.

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GRAEME: Consequently, it's never been more vital to have a really good understanding of loss prevention in your business.

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GRAEME: Most retailers think their biggest problem is a supplier issue or poor sales, when in reality it's often repeated leaks.

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GRAEME: Mispriced items, small shrinkage, unnoticed returns, things that eat away at your margins.

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GRAEME: Every pound has the same impact on your bottom line, whether it's through theft, damages, admin, pricing errors or unnecessary spend.

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CLARE: Absolutely. A death by a thousand cuts. It's not a massive mistake like a container sinking off the coast.

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CLARE: It's someone dropping something on the floor, a two pound loss here, something not put through the till properly there.

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CLARE: And over time, it all adds up.

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GRAEME: Exactly right, Clare. Many retailers blame shoplifting, but it's only part of the story.

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GRAEME: Internal dishonesty, process errors and supply chain loss often make up a much larger proportion.

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CLARE: I've been climbing around dusty warehouses during stock takes years ago, and often they were in such a mess.

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CLARE: It was a miracle anyone knew what stock they even had.

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CLARE: Getting inventory placed correctly and doing accurate stock takes means knowing what you've got, where it is and what condition it's in.

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GRAEME: The biggest part of a stock take is preparation. Really good preparation delivers great stock take results.

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GRAEME: Use your best people to do the count. Store teams know where stock hides, the nooks and crannies.

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GRAEME: If you use an external provider, make sure it's a blended approach with your own people supporting.

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GRAEME: Audit the count. Check the checkers. The data must be accurate so you can actually work with it.

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CLARE: You told me that story about a staff member stealing stock and leaving in winter without a coat.

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GRAEME: They were stealing around a thousand pounds of designer product per shift, hiding it under clothing.

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GRAEME: Over a few weeks they stole over fifty thousand pounds at cost.

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CLARE: You can't just assume someone is trustworthy. You need checks and balances.

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GRAEME: People cause one hundred percent of loss. Systems only do what people instruct them to do.

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GRAEME: Monitor trends, behaviour changes, and be open about why controls exist.

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CLARE: So it's small regular checks, not micromanagement.

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GRAEME: An over reliance on tech without understanding data is a huge mistake.

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CLARE: Consistency beats expensive tech used badly.

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GRAEME: There's no simple answer, but there are simple actions.

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GRAEME: Knee jerk reactions to stock loss often make things worse.

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GRAEME: Smart leaders maintain controls whether results are good or bad.

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GRAEME: We supported a store where profit improved once stock was protected and staff felt safer.

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GRAEME: Loss prevention became about enabling sales, not policing.

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CLARE: Cost of living pressures have changed behaviour, and staff need support and training.

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GRAEME: Trust and control must be balanced through clear processes.

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GRAEME: Shortcuts like shared codes and keys cause devastating losses.

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GRAEME: An ex employee emptied a safe because basic controls weren't followed.

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CLARE: What three things should retailers do in the next ninety days?

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GRAEME: Focus on key products, do simple regular counts, and use your data together.

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CLARE: Keep checking, observing, and staying aware.

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CLARE: Thank you Graeme. Simple human steps keep businesses healthy.

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CLARE: I'm Clare Bailey and this has been Retail Reckoning.