By Byron Kaye
SYDNEY (Reuters) - Retail theft has hit record levels in Australia, government statistics show, putting pressure on grocery giants Woolworths Group Ltd and Coles Group (OTC:CLEGF) Ltd that are already struggling with soaring supply costs and freight blockages.
Store theft rose 23.7% in New South Wales, the home state of a third of Australians, from 2021 to 2022, state government figures showed on Thursday, the fastest year-on-year increase since records began in 1995.
Queensland, Australia's third-largest state, had the highest monthly rate of shop stealing on record this January, according to publicly available police data. Neither state's data specified which retailers reported theft.
The data underscores concerns raised by analysts and social researchers that surging living costs - from grocery shelf prices to power bills to mortgages - will drive up crime. That may impact profit at Woolworths and Coles, which together ring up two-thirds of Australian grocery sales and noted rising store theft in trading updates last month.
"We would see a risk that that continues to rise if and when we start to see an increase in unemployment and tougher economic conditions," said Craig Woolford, a retail analyst at MST Marquee.
"Supermarkets operate on very thin profit margins. You only need a small change in the stock loss to have an impact on profitability," he added. Supermarkets refer to goods lost to theft, expiry or payment error as stock losses.
Woolworths and Coles declined to comment. On a Feb. 22 earnings call with analysts, Coles Chief Operating Officer Matt Swindells said the company was experiencing "elevated theft" and was investing in staff training and technology to counteract it.
Australia's jobless rate rose in January to its highest since May after nine interest rate rises that are designed to slow inflation, currently running near 8%.
"High inflation plus interest rate increases are good candidate explanations for an increase in theft from retail outlets," said Roger Wilkins, deputy director of the Melbourne Institute of Applied Economic and Social Research, part of University of Melbourne.