Retail theft is reducing retail profits. Crime losses amount to 1.3%-1.4% of sales, or $4.5-$5.0 billion, across Australian retail. The issue has ramped up globally over the past year, with some of the increase year-on-year simply a return to normalisation post COVID-19. Reported Australian east-coast retail crime for FY23 is only up 2% on FY19 levels. The drive towards self-checkouts has exacerbated crime rates and retailers with challenges, like Coles, need to implement changes. As economic conditions tighten, crime rates may rise and prevent Coles from achieving any discernible margin recovery in FY24e in our view.