In a competitive and cost-sensitive sector like retail, every pound matters. With tight margins and increasing operating costs, retail shrinkage — the loss of inventory due to theft, fraud or error — can have a devastating impact on profitability. And it’s not just about what happens on the shop floor. From internal theft and vendor fraud to stock mismanagement and checkout discrepancies, the threats to profit are complex and evolving.

In this blog, Chris Mursell, retail security expert at Chubb Fire & Security, explores how a smarter, more proactive approach to security can help retailers protect their profits, reduce shrinkage and create a safer environment for staff and customers.

Understanding Shrinkage in Modern Retail 

When most people think of retail shrinkage, they picture shoplifters slipping items into bags or bypassing self-checkouts. But in truth, external theft is only part of the story — and sometimes not even the biggest part.

According to industry data, nearly half of all retail shrinkage is linked to internal threats, including employee theft, administrative errors and vendor fraud. A poorly entered invoice, stockroom miscount, or collusion with a supplier can be just as damaging to your bottom line as a stolen item on the shop floor. 

What’s more, as retail operations become more complex with multi-channel fulfilment, self-checkout areas and increased reliance on temporary or seasonal staff; the opportunities for both intentional and accidental loss increase. With retail profit margins under pressure and operational complexity on the rise, it’s never been more important for retailers to take a comprehensive approach to loss prevention — one that looks beyond the tills and into every corner of the operation. 

AI: The Game-Changer in Retail Security 

Innovations in artificial intelligence are transforming retail operations — not just in customer experience and stock control, but in crime prevention too. Chubb’s AI-enabled CCTV systems use behavioural analytics to identify suspicious activity in real time, giving security staff an early warning of potential theft before it happens.

This kind of proactive monitoring is particularly effective in high-risk areas like self-checkout areas, which have seen a dramatic surge in misuse. A 2024 feature in The Grocer1 reported that major retailers are turning to computer vision AI to spot the subtle behaviours that often precede shoplifting — from item concealment and scan avoidance to repeated bagging without scanning, or even unusual patterns of customer hesitation or loitering.

What sets this technology apart is its ability to learn over time, improving detection accuracy while reducing false alarms — something that has traditionally been a challenge with basic motion-triggered or line-crossing analytics.

Leading UK retailers are embracing AI as a strategic response to what’s been described as a “self-checkout shoplifting epidemic”, with some reporting tens of millions in annual losses directly linked to self-service misuse.2 AI surveillance provides not only real-time alerts but also valuable evidence for investigating repeat offenders — making it a powerful deterrent and a practical tool for loss prevention teams.

The Power of Tailored Security

Every retailer faces a unique set of risks, shaped by layout, location, staffing and customer behaviour — which is why security should never be one-size-fits-all. What works for a small independent shop may be very different to the needs of a high-street fashion chain, a rural homeware retailer or a 24-hour convenience store in an urban setting.  

That’s why Chubb’s approach is never off-the-shelf. Our retail security experts take the time to understand your specific pain points — whether that’s persistent theft of high-value items, vulnerabilities in your stockroom processes or issues with late-night operations.

From strategically placed CCTV and intelligent surveillance to tightly controlled access to stockroom areas, Chubb designs and installs fully integrated systems that combine physical protection with smart functionality. Our solutions work together seamlessly to reduce loss, deter internal and external threats, and provide clear visibility into store activity — all with one ultimate goal: protecting your bottom line. 

Using Data to Go Beyond Loss Prevention 

Today’s retail security systems don’t just stop crime — they unlock valuable business insights. With the right surveillance and analytics in place, stores can go beyond protection and start optimising performance. 

By analysing data on customer movement, dwell time, queue lengths and footfall patterns, retailers can improve the layout of key areas, refine staffing schedules and reposition high-margin items for maximum visibility. The same AI-powered cameras that monitor for suspicious behaviour can also reveal what’s working — and what’s not — in your customer journey.

Through our strategic industry partnerships, Chubb offers access to advanced analytics dashboards that transform raw video footage into real-time, actionable intelligence. Retailers can quickly identify trends, respond to shopper needs and even test the effectiveness of in-store promotions.

By harnessing the full potential of modern security technology, retailers can not only protect profits — they can grow them.

The Wider Threat Landscape 

While physical shrinkage remains a key challenge, retailers are also under threat in the digital space. Just last month, Marks & Spencer confirmed a cyber-attack that exposed customers’ personal data, including names, emails and partial card details.3 While M&S has stated that its systems weren’t breached directly, the incident is a stark reminder of how interconnected today’s risks have become. 

Although Chubb doesn’t provide cyber security services, physical access control — including the protection of server rooms, offices and delivery areas — plays a crucial role in supporting cyber resilience. Ensuring that only authorised staff have access to sensitive areas is a simple but effective layer in a retailer’s overall security strategy.  

Profit Protection Starts with Proactive Security 

Protecting retail profits is about more than deterring shoplifters — it’s about building a security strategy that fits your business, detects threats early and delivers measurable results. 

With intelligent surveillance, real-time alerts and tailored solutions designed around your store’s needs, Chubb is helping retailers across the UK cut retail shrinkage, improve inventory accuracy and ultimately boost their bottom line.

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