Associated British Food chief says theft and antisocial behaviour have hit fashion chain’s profit margins
The boss of Associated British Foods, which owns the fashion chain Primark, has become the latest business leader to warn about a marked increase in retail theft and abuse against staff in stores around the world.
Chief executive George Weston said the behaviour was “worse than we’ve seen in the past and it continues to get worse”. It had even weighed on Primark’s profit margins over the past year, he added.
“Theft levels and antisocial behaviour in-store are up, which is a nice way of saying people attacking store staff,” Weston told the Financial Times on Tuesday. “It will just continue to deteriorate unless the authorities responsible for law and order recognise the issue we’ve all got.”
His comments echo similar remarks in recent weeks by Ken Murphy, chief executive of Tesco, and Dame Sharon White, who chairs John Lewis and Waitrose.
The UK accounted for about half of the incidents at Primark but the issue was “everywhere”, Weston said, including France, the Iberian region and the US. In some instances, thieves walked out with goods worth more than £250.
Previously, the group had forecast an adjusted operating profit margin of about 8.3 per cent at Primark in the second half of the year, but in a pre-close trading update on Tuesday, ABF said it expected it to be slightly below 8 per cent “in part due to due to higher than expected stock loss from stores”.
Like other retailers, the fashion chain has been increasing the number of security guards in its stores as well as investing more in CCTV systems and body cameras worn by staff to deter shoplifters.
But Weston called on chief constables, the Crown Prosecution Service and magistrates to toughen rules and their stance on offenders to curb incidents in the UK.
He believes a combination of factors is driving the behaviour including organised crime and the cost of living squeeze, adding it could even be a consequence of “all of us being locked down during Covid-19” or social media.
“I’m not a sociologist but something needs to change and we need to get a grip on it,” he said.
Last month, a “robbery” campaign that was supposedly orchestrated on social media led to hundreds of teenagers gathering outside sportswear brand JD Sports on London’s Oxford Street, leading to store closures and several arrests.
US and UK stores have been grappling this year with increased rates of “shrink” — a catch-all term for theft and organised retail crime — though it is not a new issue for the sector.
Separately, Associated British Foods raised its full-year profit outlook for the second time in four months, thanks to resilient sales at Primark and a strong performance from its food division in its fourth quarter.
It said adjusted operating profit for the year to September 16 would be “slightly better” than its previous expectation of “moderately ahead” of the £1.4bn it made in 2022, sending the shares up almost 6 per cent.
