Retail crime: The legal risks retailers can’t ignore

This article is provided by BRC Associate Member, TLT.

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Retail crime is no longer just a cost—it’s a crisis. Shoplifting alone cost UK retailers over £2.2 billion last year, according to the Association of Convenience Stores. This number does not paint the full picture, as employee wellbeing, financial stability, and even the future of the high street increasingly wanes. 

In our Retail Agility report: the rise in retail crime, we surveyed 100 of the UK’s leading retailers to understand how retailers are addressing crime and the legal considerations. 

The Shopfloor Battle

On the ground, shopworkers are feeling the stress. Despite shoplifting being the highest reported crime at 88%, physical and verbal abuse follow close behind, at 81% and 86%.

The risk varies across sectors. For example, 100% of grocery retailers reported acts of physical violence against staff, compared to 84% in fashion, 79% in home, and 75%, in life sectors. 

The stats display a worrying picture: 44% of retailers have seen increased turnover, 42% face recruitment difficulties, and 41% higher absenteeism. 

What are the employment law risks? 

Employers have a legal duty to protect physical and mental health, safety and welfare of their employees. Retailers should conduct detailed risk assessments, particularly after incidents, and monitor store operations closely to manage risks effectively. 

Support for colleagues who are victims of violence, and how to access it, should be clearly communicated. While robust reporting and whistleblowing procedures helps prioritise employee safety and value. 

Failure to act can lead to financial penalties, and regulatory scrutiny. With the topics receiving considerable traction in the news and frequently highlighted across the retail sector. Retailers should review employee contracts and facilitate wider engagement with their employees, as concerns about wellbeing tie into broader health and safety responsibilities.

Investing in training is also key, and 50% of retailers agree. Whether that be training colleagues on how to manage escalating situations, mental health training for shop floor workers, or training managers on dealing with internal workplace grievances.

An investment in safety brings many advantages, including in recruiting and retaining talent, boosting morale, reducing sickness absence levels, and improving overall efficiency.

The financial impact 

Retailers are adopting a range of financial strategies to manage rising costs, with the most common approach (44%) being to pass these costs onto customers through higher prices. Notably, 42% of retailers plan to raise prices specifically to offset crime-related expenses. In contrast, 29% are choosing to absorb these costs internally, likely to avoid losing customers to competitors offering lower prices.

To tackle the growing issue of retail crime, businesses are turning to a mix of preventative measures. The most widely used tactic is product tagging, implemented by 61% of retailers to deter theft and improve inventory tracking. Additionally, 57% are restricting product displays or access to limit opportunities for shoplifting. Modified store layouts are also gaining traction, with 44% aiming to improve visibility and control, while 45% have invested in enhanced in-store security.

What are the legal risks of using AI to predict crime?

Last year, the Co-op deployed artificial intelligence to identify offenders with concealed weapons, or stolen items. Similarly, French software company, Veesion, has deployed its AI tech to 5000 stores to predict shoplifting before it occurs. 

However, there are legal risks. Unlike the EU and some other jurisdictions, the UK has no specific AI regulation. So, retailers with operations in multiple international locations must decide whether to take a uniform approach to deployment of AI systems, following the most stringent rules they are subject to in any one jurisdiction across all their locations, or take different approaches depending on local law. 

Regardless of the approach, the regulatory landscape is evolving rapidly. Retailers implementing AI must stay vigilant, as systems that meet compliance requirements today may fall foul of future legislation.

What about more in-store surveillance that’s not AI? 

Even less advanced technology, such as CCTV, bring legal obligations. Retailers must comply with data protection laws, such as UK GDPR, and conduct Data Protection Impact Assessments (DPIAs) to identify and mitigate risk in the use of personal data.

Where surveillance is new, businesses may need to update employee and customer-facing privacy notices, signage, and employee handbooks. It is also crucial to have and follow clear data retention polices, retaining personal data only in ways consistent with the lawful basis for which it is collected, and keeping it for specified timeframes, typically for surveillance systems for days or weeks only. 

If you want to know more about how you can compliantly support your people and stores, contact our retail team today.