Retailers are facing new challenges as they look for solutions to an unprecedented surge in retail crime, with many increasing their investment into technology to combat the problem, according to a new report by national law firm TLT. The consequence of this investment is going to increase prices.
The report, based on a survey of the UK’s top 100 retailers, highlights the scale of the problem and how retailers are increasingly turning to technology such as AI driven analytics and biometric security systems as critical lines of defence. In addition, nearly half (48%) of retailers report that they will have to pass the increased expenses incurred onto consumers through higher prices. In a period of economic uncertainty, such price increases will not favour increased consumer spending.
Among the key findings of the report include that:
- 100% of retailers reported experiencing some form of crime in the past year
- 88% reported incidents of shoplifting, 86% reported cybercrime, 81% reported physical abuse, and 86% reported verbal abuse
- 43% plan to invest in technological solutions as a proactive measure against rising expenses
The report also lays bare the heavy toll that retail crime is having on workers, with 44% of retailers reporting increased employee turnover and 42% facing recruitment difficulties due to safety concerns.
Lower business rates introduced for the retail industry from 2026/27 will create financial strain on top of the rising costs of retail crime, with an estimated £7bn increase in annual costs after October’s budget, and many major retailers having written to Rachel Reeves concerned by job cuts and higher prices. According to the report, nearly two-thirds (63%) of retailers say they have increased their security budgets.
While the government has begun to acknowledge the issue, namely through the Home Office Police Reforms in November 2024, the report stresses the urgency of immediate, practical solutions. Retailers are calling for more robust support to ensure the sustainability of businesses and the safety of communities, and the report lays out recommendations for a multi-faceted strategy to combat retail crime.
Read the full report on the TLT website here.
Perran Jervis, partner and head of retail and consumer goods at TLT, said: “The social and economic consequences of this issue cannot be underestimated. The report highlights how the industry is innovating to address these challenges, but many retailers do not have the capacity, financially or operationally to tackle this alone so collaborative action and government support are essential to create a lasting solution to the problem.
“When deploying technologies like surveillance systems or supply chain optimisation tools, organisations must comply with data protection laws, such as the UK GDPR. For systems involving high risk processing, like surveillance tools, this includes conducting Data Protection Impact Assessments (DPIAs) to identify and mitigate risk in the use of personal data. If organisations are using these sorts of tools for the first time, they might need to update employee and customer-facing privacy notices, signage in areas where surveillance systems are used, and documents such as employee handbooks.”
Ed Hayes, partner and technology lead in the retail and consumer goods team at TLT, added: “Retailers are under immense pressure, battling rising costs, inflation, and the demands of regulatory compliance. Recent technology development has emerged as a game-changer, offering sophisticated tools like AI-driven surveillance, facial recognition, and more robust cybersecurity to tackle both physical and digital threats.
“Research and data released by regulators regularly show that the most significant issue in cybersecurity is human error, and that is often the result of a lack of training. To mitigate this risk, organisations should implement comprehensive cyber security awareness training and regular refresher courses to give themselves increased protection from cyberattacks, and to ensure their staff understand how technology is being used to prevent retail crime.”
