A Long Recession Provides a Big Lift for Shoplifting

When the economy goes bad, does crime go up? You bet, especially at retail. And that’s bad news for easy-to-conceal items such as cosmetics and fragrances. The level of global retail theft reached nearly $115 billion in 2009, up 5.9% over last year, according to the Global Retail Theft Barometer, a study which monitored the costs of shrinkage and crime in the global retail industry between July 2008 and June 2009.

Stealing beauty: cosmetics are easy items to swipe.

The third annual study—which was sponsored by Checkpoint Systems, Inc., a provider of shrink management, merchandise visibility and apparel labeling solutions—found that the increase in theft occurred in all regions surveyed, with the greatest increase coming in North America (+8.1%), followed by the Middle East-Africa (+7.5%) and Europe (+4.7%).

“Retailers attribute one third of the increase in shoplifting to the economic recession,” noted Joshua Bamfield, director of the Centre for Retail Research and author of the study. In addition, Bamfield said retailers have noted a change in the type of offender and in the type of products stolen.”

Some of the highest average shrinkage rates were found in apparel and fashion/accessories (1.84%) and cosmetics/perfume/ beauty supply/pharmacy (1.77%), according to the study’s authors.

Thieves tend to focus on small and easily concealed, expensive, branded items that have considerable popular appeal and are easily re-sellable. Among the most vulnerable are electronic games, DVDs/MP3 players as well as cosmetics, face creams and perfumes. Razor blades and shaving items were also cited as high on the list of swiped goods.

“While most businesses have suffered as a result of the recession, few have been as hard-hit as the retail industry,” added Rob van der Merwe, chairman, president and chief executive officer of Checkpoint. “While retailers have had to cut budgets in most areas, this year’s study shows the adverse effect of cutting spending too deeply in the area of loss prevention. Prudent spending in this area can have a very positive effect on bottom-line numbers, and act as a force-multiplier, especially as budgets for training programs and security personnel are reduced.”

More info: www.globalretailtheftbarometer.com

European Home, Fabric Care Market Remains Dynamic

Driven by demands for green chemistry, sales of home and fabric care specialty ingredients in Europe will rise from $905 million in 2008 to more than $1.0 billion in 2015, according to Frost & Sullivan.

While the chemicals industry was particularly hard hit by the recession, the market for specialty ingredients in home and fabric care formulations remains dynamic, fueled by the need to minimize bacteria and germs and reduce time and effort on household chores, while addressing the environmental concerns of consumers, according to Frost & Sullivan.

Products like Henkel’s Terra Activ range are driving growth in green chemistries.

“The advent of the green consumer who prefers natural products that are derived from renewable or recycled sources, have an environmentally friendly profile in terms of toxicity and are safe to use is the catalytic driving force,” noted Frost & Sullivan industry analyst Leonidas Dokos. “The growing demand for more efficient and technically novel chemicals to assist in daily home and fabric care tasks has rejuvenated this mature market as producers focus on addressing the evolving demands of consumers.”

Specialty ingredients with an improved environmental profile are pulling the market and influencing demand. At the same time, there is a market push in the form of European Directives, with regulators increasingly insisting on reduced toxicity and enhanced biodegradation of such products, according to the research firm.

Increasing consumption in emerging European markets will further assist in the growth of home and fabric care specialty ingredients, while in the developed markets of Western Europe, green products and innovation are crucial. Also important to growth is the fact that companies active in the market are focusing on reducing the average product development time as product life cycles shorten.

However, sustaining capital and resource investment in research and development in order to maintain healthy pipelines of innovative products, while at the same time controlling the cost, will be the key challenge for suppliers to this market. More-over, the current economic crisis is eating into consumer products demand, particularly in Europe and the U.S., temporarily highlighting consumer price consciousness.

“In 2008, the chemicals sector was the only one among the top 15 sectors in the world showing an investment decrease in research and development of 1.3%, while the household goods sector experienced a decrease in research and development investment of 6.1%,” explained Dokos. “When combined with plant shutdowns, recently introduced legislative frameworks that increase costs (such as REACH) and the ongoing economic uncertainty, it becomes clear that the suppliers to the home and fabric care industry are facing a challenging environment.”

Strategic acquisitions, focus on key market segments, promotion of product differentiation and green innovation are critical in overcoming market challenges and addressing evolving market and consumer needs, according to Dokos. However, the completion of strategic acquisitions can only be realized by market participants with strong cash flows.

“Some of the leading chemical companies have opted for strategic acquisitions continuing the consolidation trend, while others have focused on strategic alliances. However, the key to growth remains innovation and addressing the needs of the green consumer without compromising the technical performance of products,” Dokos added.

Frost & Sullivan’s analysis of the market covers specialty surfactants, functional polymers, fabric enhancers, active ingredients and rheology modifiers in home and fabric care as well as hard surface cleaners, car interior and upholstery cleaners, fabric care, furniture, shoe and leather polishes and dishwashing products.

More info: www.frost.com