Supermarkets are rolling out high tech to catch shoplifters as cost

John-Paul Drake poses several sarcastic questions on his Instagram page like this one: "Does this Customer Magician have the world's whitest teeth? I'd really like to find out."

The director of Drakes Supermarkets appears in front of the CCTV footage taken at one of their stores in Adelaide showing an individual wearing a mask stuffing tubes of toothpaste into his backpack and pockets.

John-Paul narrates on the Instagram post, showing footage of the individual leaving the store without paying: "You can't just walk out, I think you've got to pay for those things in your pocket…Or are you just happy to be shopping at Drakes?"

The supermarket boss's narration continues: "Well, this isn't shopping. This is a magic show we want to stop."

"Magician" is the term John-Paul uses for the various individuals he's released CCTV footage of on social media in recent months, before calling on the public to provide details so that he can pass it on to the police.

Crime is happening at the same time cost-of-living pressures have put more Australians under financial stress, and it comes as major supermarkets including Coles and Woolworths are reporting record profits and margins, driven largely by higher prices.

John-Paul says social media has proved a very successful tactic helping catch the "magicians".

"We are seeing an 80 per cent conviction rate once they (the vision of these individuals) have been released onto the Instagram page," he says.

"Within five to 10 minutes we'll have details of their Facebook accounts, and where they live, from people that have seen these people cruising the streets and happy to give up their information."

Alleged offenders get logged into a system monitored by police, so that when it comes to prosecuting alleged crimes, all incidents spanning over weeks or months are considered.

John-Paul says over the past year there's been a 236 per cent increase in shoplifting costing the business about $10 million.

He says cost-of-living pressures are playing a part in the increase in theft, but also points out that those stealing are often serial offenders, and some are involved with organised crime gangs.

"We are not talking about someone coming to take some economy beef or some bread to feed their family," he says.

"The 236 per cent increase [in theft] is from repeat offenders. These are offenders that are stealing high end items like Wagyu beef, Angus pure beef, makeup products, and anything that can be easily sold on other marketplaces."

John-Paul Drake says the items taken are typically sold to local clubs and on social media marketplaces.

"We've been told with our relationship from the police, that they are organised gangs," he says.

"But we've also been told that this is people that are using this money to buy drugs, or to supply restaurants with meat that has come from our supermarkets."

Drakes Supermarkets is not the only retailer seeing a wave of crime in recent months.

Australians are feeling more pain at the petrol pump as prices rise to the highest level so far this year, and analysts say the rising prices are likely to stay for "the next few weeks" at least.

Estimates are that theft is costing the entire industry in Australia hundreds of millions of dollars annually, and the major supermarkets Coles and Woolworths, have reported big spikes over the past year.

So has Fred Harrison, CEO of Ritchies IGA Supermarkets. He told ABC radio national in July, that there's been "significant increase in shoplifting" amid the rise in cost-of-living pressures.

He says a carload of five youths recently turned up at one of their stores in Narre Warren, Melbourne, grabbed slabs of beer took them without paying, and drove off.

"Totally brazen, and it was all over in 30 seconds," he said.

Detectives in their stores were catching twice as many people as they were 12 to 18 months ago, he said.

"That's becoming a real concern; just the lawlessness that's taking place," Mr Harrison said.

QUT Professor Gary Mortimer, who does research on food retailing and consumer behaviour says it's not just a local problem.

"Retailers across the globe are reporting high levels of consumers that aren't paying for goods or not scanning goods appropriately," he says.

Mr Mortimer says while shoplifting has always existed, inflation pressures and organised crime gangs are seeing the frequency and the severity increase.

"There's a correlation between increasing costs of living families under financial pressure and increasing frequency of retail theft," Mr Mortimer says.

"It's obviously a very profitable exercise for organised crime gangs — they'll often steal to a list.

"They'll construct a list of wanted items, whether it's beef products, or moisturisers, personal care products, baby formula, and they'll go into the supermarket or a retail store, specifically to identify those products that they need to shop for."

Coles CEO Leah Weckert also revealed this week that theft and product markdowns is costing the retail giant.

She says theft and product markdowns have increased "about 20 per cent year on year — and that is driven by the organised crime".

But the company is still reporting higher margins thanks to higher prices for groceries.

The company reported a $1.1 billion profit for the 2022-23 financial year, a 4.8 per cent increase.

Coles' margin grew by five basis points to 26.4 per cent.

Wesfarmers director Rob Scott told ABC's The Business program stock loss was an issue they were managing.

The operator of Kmart, Target, Officeworks and Bunnings on Friday posted an 18.2 per cent jump in revenues for the year to $43.6 billion.

Profits for the period were up 4.8 per cent to $2.47 billion, with Kmart and Officeworks delivering some of the group's highest returns for the year.

"We've seen an increase in stock loss over the last 12 months in our retail businesses, but it's been fairly modest and it's largely been a reversion back to levels experienced pre COVID," Mr Scott said.

To stop the thieves, Coles is spending big on trolly locks and smart gates that can tell if someone is leaving the store without paying.

"What we're really focused on now is putting in place a number of initiatives which will help us to address the issue, including security solutions in the store, like having a security guard there, but also some technology solutions," Ms Weckert says.

Woolworths, which recorded a 4.6 per cent rise in full-year profit to $1.62 billion, is also increasing its spend on security and technology to fight the problem.

Thanks to higher prices for groceries, it saw a big lift in its food margin — up by 76 basis points to 28.1 per cent.

Its chief executive Brad Banducci this week wouldn't specify how much theft has wiped off their bottom line, but noted that it is happening among "a very small subset of customers in our stores, and loss, or theft has gone up".

He says people are stealing items that are easy to resell — "whether it's razor blades, beard trimmers, electric toothbrushes, those kinds of things".

"And we've seen a number of customers be aggressive to our team," Mr Banducci says.

Woolworths has spent $50 million on assisted scanners when people use self-service check-outs. But there's a number of other measures being rolled out across the business.

"When you come into a store, you come through a welcome gate to what is now called a double welcome gate — that's two gates … to prevent someone just pushing a trolley out through the front of the store," he says, noting these double gates are now in virtually every store in their network.

He says there's now also systems in over 500 stores that ensure someone using a self-service check-out correctly scans a product before they leave the store.

John-Paul Drake is also having to spend more on security.

"We have had to increase loss prevention officers in stores, we've increased our security team as well," John-Paul Drake says.

"And we're also making our staff aware that these are the sorts of things going on in stores and to keep an eye out for them.

"Unfortunately, for us, we've seen a huge increase in violence (against staff) in the supermarkets — we had 18 incidents in the last year alone."

He believes tougher penalties should apply for serial offenders.

"It's wasted money that we're using on resourcing into making sure people are doing the right thing," he says.

"I want to explain that 98 per cent of our customers are doing the right thing. It's a small few that is ruining it for everyone else."