Loss Prevention Management: Inhouse or Outsourced?

With some 7.5 million people employed in the retail sector, it is estimated that close to 1 million jobs have been lost, including many of those in Loss Prevention, LP.   This is at a time when retail crime is on the rise – the BRC estimates that the retail sector lost £1.3 billion to criminality last year.

However, with retailers spending £1.1bn to fight crime, they are continuing to look for further cuts in the LP budget.  So how are they to balance the costs of security with the need to reduce losses to shoplifting and other theft?

Yesterday, I was contacted by three of my colleagues in the LP sector, until recently employed as internal Loss Prevention Managers for major companies.  All three have been ‘let go’ due to downsizing caused by the pandemic, with a full-time LPM, role being deemed an unaffordable luxury in the current economic climate.  Interestingly, one of these companies has also recently made enquiries about utilising Lodge Service’s outsourced LP services on an adhoc basis to fill the gap left by his departing LPM.

This led me to consider the relative merits of ‘in-house’ versus ‘outsourced’ retail LP provision and how best the Lodge Service Group, as an external provider, could continue to provide an efficient and all-encompassing service to support those clients who are unable to maintain a dedicated internal LP resource.  Having undertaken the role of internal LPM for a number of years before joining Lodge Service allowed me to see both sides of the equation and make the following observations.

As we all know, loss prevention should be an integral part of any operation, underpinning your strategic approach to the way you run your business.  By employing a designated LPM to implement, and ensure compliance with, agreed LP policies and procedures, plus support the business with reactive investigations into potential theft and non-compliance issues, you will undoubtedly minimise your losses, protect your profits and provide support to the greater business. 

However, this can be expensive and some businesses simply can’t afford the ongoing cost of a full time LPM, which is where a reputable, experienced outsourced security provider can help.  You need to find a provider who can address all your loss prevention needs, both in terms of manpower and technical solutions, and is able to demonstrate a tangible cost benefit to the business, developing a strong relationship based on a mutual understanding of your requirements and their capabilities in order to form an effective partnership.  As well as being able to react in a timely manner to requests for adhoc investigation support, you also need to consider your proactive requirements, such as continuous data mining, compliance auditing, and ongoing risk assessments of key areas of the business. 

Lodge Service provides a full range of outsourced LP services to a large number of small, medium and large companies, including high street retailers, charity retail and the hospitality and entertainment sectors.  Our portfolio of services includes manned guarding, audit & compliance, cash & stock loss investigation support, PoS test purchasing and a full range of technical services including data mining, CCTV and alarms. 

Having worked on both sides of the fence, I understand the difficulties in finding a decent supplier who you can trust with your business; Lodge Service’s aim is to form a partnership, based on transparency, professionalism and reliability.  If you are in the unfortunate position of having to down-size your inhouse LP resource, please get in touch, we’re here to help.

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Pete Thomas, Head of Profit Protection at Lodge Service since 2005, spent 22 years in the Royal Air Force Police before joining Tesco LP Dept where he spent 5 years working in a DC/Retail LP role.

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