Shoplifting is most costly type of loss in supermarkets, a Food Marketing Institute study reports

Business Wire, May 6, 1996

CHICAGO--(BUSINESS WIRE)--May 6, 1996--For the sixth year in a row, shoplifting is still the most common and costly type of loss in supermarkets, according to the 1996 Security and Loss Prevention Issues Survey conducted by the Food Marketing Institute (FMI) and sponsored by Checkpoint Systems, Inc. (NYSE:CKP).

EAS (electronic article surveillance) and CCTV (closed circuit television) were the most often recommended solutions to control shoplifting and internal theft. Of the 65 supermarket company respondents operating more than 7,000 supermarkets, 53 percent recommended EAS and CCTV as the top cost-saving security solutions. The second most cost-effective recommendation (34 percent) was employee training and awareness.

According to Kevin Dowd, president and chief operating officer for Checkpoint, the company's EAS and CCTV systems have proven track records in controlling the two most pressing security concerns facing supermarkets. Internal theft ranked as the number one concern, named by 48 percent of the respondents. External theft, second, was named by 34 percent. "Our supermarket customers are seeing a bottom line impact on shoplifting losses after installing our radio frequency (RF) EAS systems with shrinkage reductions as high as 50 percent," said Mr. Dowd.

The FMI study found that the more a company budgets to loss prevention, the greater the number of shoplifter apprehensions on a per store basis. This trend shows that greater expenditures on loss prevention can have meaningful results, the study noted.

To control internal theft, the respondents recommended CCTV systems which can be positioned at locations where most employee theft occurs. According to the study, 45 percent of the detected incidents of employee theft occurred at the checkout. At checkout, a combination of discounting or "sweethearting" and sliding (purposely failing to scan) accounted for nearly 25 percent of employee theft.

Checkpoint's video surveillance solutions, including CCTV and total transaction monitoring systems, have been designed specifically to control internal theft at checkout. CCTV cameras can also be positioned in the sales and service area where 22 percent of internal theft occurs, and in the back room where nine percent of internal theft occurs. In addition, Checkpoint has developed an EAS scan/deactivation solution that allows deactivation only after a valid scan has occurred.

The Food Marketing Institute is a non-profit association conducting programs in research, education, industry relations, and public affairs on behalf of its 1,500 members including their subsidiaries -- food retailers and wholesalers and their customers in the United States and around the world. FMI's domestic member companies operate approximately 21,000 retail food stores with a combined annual sales volume of $220 billion -- more than half of all grocery store sales in the United States.

Checkpoint Systems, Inc. is a leading provider of integrated security solutions for retailers worldwide. Leading supermarkets using Checkpoint's security solutions include Harris Teeter, Lucky's Supermarkets, Ralph's Grocery Company, Safeway Supermarkets, Vons, and Winn Dixie.

CONTACT: Glenda Laudisio

Checkpoint Systems, Inc.

800/257-5540, ext. 2411

or

Gary Denmark

Mallory Factor Inc.

212 / 242-0000