Restaurant and Food Service Loss Prevention

Providing Best Practices to the Food Service Industry

Food Prices on the increase…Employee Theft to follow

Posted by LP Innovations

Aug 11, 2011 10:30:00 AM


Recent articles from news sources including Bloomberg, USA Today and Nation’s Restaurant News show that food prices are positioned to increase dramatically the remainder of this year into next year. Increases in corn, rice, sugar and other commodities are making their way to the consumer through increases in food and groceries. What does this mean for restaurants, grocers and other food service providers? It means higher menu prices, lower sales and based on historical trends, an increase of employee theft.

Increasing Food CostsIncreased food costs, whether in the form of commodities, raw groceries or prepared foods, eventually make their way to consumers in higher menu prices and groceries. These higher prices are a direct hit to the average American worker’s pocketbook. How much of a hit to a person’s pocketbook depends on how high food costs are expected to rise. Here are some of the recent alarming statistics from the above news articles;


  • The U.S.  Department of Agriculture expects a 3% - 4% increase in food costs
  • USDA forecasted that 2012 prices will increase 2.5% - 3.5%
  • Yum Brands, Inc., parent of KFC and Pizza Hut, said in July that commodity costs would rise as much as 7%
  • The Bureau of Labor Statistics has already stated that total expenditures for food at grocery stores rose 4.8% over the past year (ending in June).This statistic is up from 4.4% in May.
  • Food service providers, including manufacturers, grocers and restaurants have already stated increases to their pricing. Coca-Cola for example, already stated that they would increase prices the 2nd half of this year.
The Correlation to Employee Theft
Surveys and studies across various retail industries have shown that employee theft continues to be the largest contributor to loss in the United States. Recent statistics, which have taken into consideration the recent economic recession, have shown that losses have increased, with employee theft continuing to lead the way.
Although the restaurant and food service industry associations have not produced any recent data on the topic of employee theft, this industry is not immune to theft and in fact, may be the ones more susceptible to theft with increased food prices.
“The average employee in the US today has seen significant increases in the cost of gas and food while wages have remained stagnant or even reduced when adjusted for inflation. Having lived through several years of stagnant wages and the rising cost of commodities they have seen a real decrease in their purchasing power. Under these circumstances historical trends generally indicate that US Businesses should brace for a marked increase in the levels of employee theft," states Steven May, CEO & President of LP Innovations.
When an employee’s basic costs of living is affected, those employees, who under normal circumstances would not think about theft, end up in difficult situations where feeding their family or paying their mortgage means more than their integrity.
“The driver of this increase in employee theft  is not only do you still have your typical justifications for the theft such as greed, but the added pressure to pay the bills and putting food on the table with less income,” added Mr. May.
How can you prevent an increase in employee theft?
“Restaurant owners, operators and management need to educate their employers on the potential wave of increased theft during these tough economic times and take proactive steps today to deal with it,” recommends Steven May. These proactive steps include;
  • Having a structured program in place that focuses on various aspects of a food service loss prevention program.
  • Working with your employees to communicate, educate and make them aware of theft, its consequences to the business and to the individual.
  • Knowing what to do if a situation arises pertaining to theft and protecting your business from costly and unnecessary legal and employment issues if an investigation into theft is not conducted properly

There is a lot of uncertainty happening now in our country. At the macro-level it may not be possible for us to change what is happening with food costs, the debt crisis or other larger economic issues. What is possible is how you can protect your business from the potential cost of employee theft. Do not think that employee theft will not happen – it will. Be prepared, proactive and preventive with a good loss prevention program.

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Topics: employee theft




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