2010 Convenience Store News Security Study

With worsening economy, employee theft of both merchandise and cash is retailers’ biggest concern

It’s no secret that one of the top concerns for convenience store owners is security, and with the economy still in an uncertain state, both internal and external theft continues to burden single-store owners and chains alike. Reducing theft and shrink has been among the top three investments made by c-stores for years, and in 2010 it ranked No. 2 for planned technology investments in a Convenience Store News study.

In the 2010 Convenience Store News Security Study, responding retailers said security spending represented 2.2 percent of sales, up from 1.9 percent in 2009, and as a percent of gross margin, money spent on security was 2.8 percent, up from 2.4 percent in 2009.

Fig. 1 Rating of Security Problems

One of the biggest issues affecting theft and shrink 舒 both internal and external 舒 is the economy. When asked if economic concerns for the past two years contributed to increase in theft at convenience stores, 76.5 percent responded ‘yes.’

CSNews’ last security study, conducted four years ago, cited gas drive-offs as the most serious security problem facing convenience store operators, but since then, many companies switched to prepay programs and other means to curb theft in this area. In 2010, gas drive-offs now rank No. 4 on the list, with only 18.3 percent reported it as a serious issue.

Fig. 2 Percentage of Robbery-Free Stores in Past Year

Fig. 3 Are Store Employees Given Security Training?

Fig. 4 Types of Security Training

The new top concern for c-store operators is employee theft of merchandise, as 41.8 percent reported the issue as most serious and 29.7 percent said the problem increased over the past year. No. 2 on the list is employee theft of cash, as 33.6 percent cited the issue. Shoplifting also increased to the No. 3 position 舒 most likely a direct result of the economy 舒 from No. 5 four years ago, and one-quarter of respondents said this was a serious issue, with nearly 30 percent reporting the issue increased in the past year.

Looking at in-store robbery, 60 percent of retailers reported all stores in their company remained robbery-free in the past year, while 13 percent responded all stores had some type of robbery activity, and 11.3 percent stated of their stores, between 70 percent and 89.9 percent remained robbery-free. In the past two years, the percentage of robbery-free stores remained the same for 76.3 percent of respondents and increased for 12.7 percent.

Fig. 5 When Security Training Takes Place

Fig. 6 Have Economic Troubles of the Past Two Years Contributed to an Increase in Theft at C-stores?

Fig. 7 Types of Shrink

Fig. 8 Security Spending

Overall, merchandise shrink represented 4.7 percent when taken as a percentage of sales, and 38.3 percent of respondents reported an increase from the previous year, while cash represented 3.0 percent of sales and 24.2 percent reported an increase in the past year. Gas drive-offs amounted to 1.5 percent of sales, but 23.6 percent reported a decrease in incidents over the past year, while other gas shrink accounted for only 0.8 percent of sales.

Furthermore, 65.3 percent of respondents to the survey scan products at the checkout, and 56.4 percent said shrink decreased after implementing the technology at convenience stores.

Fig. 9 Effectiveness of Security Devices and Measures

TRAINING THE TEAM

A total of 87.4 percent of c-store operators that responded to the survey reported some type of security training for employees, with 43.6 percent utilizing more than one type of training. The most popular approach is one-on-one training (82.2 percent), while training videos were used by 32.7 percent of operators, and training manuals and materials were reported by 31.7 percent. Other training tactics included computer-based training (20.8 percent) and training classes and lectures (15.8 percent).

When asked when security training takes place, 33 percent responded during employee orientation only; 52.8 percent reported it as an ongoing and continuous practice; and 14.2 percent stated it was during orientation and afterwards for a specified period of time.

EFFECTIVE SECURITY MEASURES

While security remains an issue for c-stores, the good news is 82.2 percent reported prosecuting offenders and 68.1 percent reported receiving restitution, mostly due to the sophistication of security technology and best practices in the industry, including the clarity of digital video recorders. For example, 93.7 percent reported the use of interior closed-circuit cameras, while 84.0 percent use them on the exterior of the store. Also, a popular best practice is to keep low amounts of cash in the register drawers 舒 a tactic used by 88 percent of respondents.

These three options are the most popular form of security used in convenience stores today, and ranking No. 4 is manual drop safes, used by 78.9 percent, while door and window alarms rank No. 5, with 78.7 percent of respondents using them.

Other popular security measures include removing signage in windows to provide a clear view (76.3 percent); improving the lighting both indoors and outside (72.3 percent); lowering shelving and displays for better visibility throughout the store (71.7 percent); and posting two clerks on duty (68.8 percent).

For those responding to the survey, the least-popular security tactics include bullet resistant enclosures, as only 8.8 percent reported their use, and security guards, as only 9.8 percent reported this option. Additionally, only 17.6 percent reduced store hours to prevent security issues.

Fig. 10 How Often Are Security Camera Images Reviewed?

Fig. 11 Was Restitution Received?

When it comes to effectiveness of each security technology or practice, the most effective according to the survey is prepay for gasoline purchases, as 90.3 percent reported this option “very effective.” The second most effective is improved lighting. Ranking No. 3 is central monitoring systems, either video or digital, followed by manual drop safes (71.4 percent), and interior closed-circuit cameras (70.8 percent).

Fig. 12 Were Offenders Prosecuted?

Fig. 13 Change in Shrink After Adding Scanning

The majority of convenience store retailers review security cameras only when there is a problem (37.8 percent), while 36.7 percent review them daily and 21.1 percent review footage weekly. Only 4.4 percent reported looking at footage several times a day.

METHODOLOGY

A total of 119 c-store executives with authority for security and operations at their company were included in this study. A total of 49.2 percent of respondents represent single stores, while 50.8 percent are from chains with two or more c-store locations.

By region, 34.4 percent of survey respondents are headquartered in the Midwest, 32.8 percent are from the South, 18.5 percent are located in the West and 14.3 percent are from the Northeast.

For comments, please contact Tammy Mastroberte Executive Editor, at [email protected].

Fig. 14 Responses by Region

Fig. 15 Responses by Number of C-stores Operated