Oct 26 (Reuters) - Australian retailers are ramping up their tech security initiatives, including placing cameras at self-checkouts and body-worn cameras on staff, to combat a surge in stock theft and customer aggression aggravated by the cost of living crisis.

Top supermarket chains like Woolworths and Coles have flagged a pickup in store theft and hostile behaviour, in line with global trends, as higher fuel, housing and grocery costs squeeze shopper budgets and tempers.

Customer-facing staff at Coles and Woolworths, which together make up two-thirds of Australian grocery sales, have started wearing body cameras to record threatening behaviour, while trolleys are being fitted with wheels which automatically lock if a shopper tries to leave without paying.

"Any rise in threatening behaviour towards retail workers is a deeply concerning trend for our retail partners and our communities," said Phil Thomson, CEO of New Zealand security software provider Auror, which is used by retail staff to share reports of suspicious customer behaviour.

"Unfortunately the data suggests it's continuing to occur," added Thomson, whose firm counts Coles and Woolworths as clients.

Executives at Coles, which clocked a 20% increase in "stock loss" in the year to June 2023, said on an Oct. 26 sales call that it was rolling out the new security technology in about one-third of its 800 stores by the end of the calendar year.

"Threatening situations arise ... as the cost of living pressures have exacerbated," Coles CEO Leah Weckert said.

Weckert didn't disclose how many stores had the surveillance tech so far, and Coles didn't give updated stock loss numbers in the limited quarterly update but she said the company "would expect to see benefits ... starting to come through in H2."

Reports of store theft surged 23% in Australia's three largest states of New South Wales, Victoria and Queensland, home to three-quarters of the population, in the year to March 2023, according to the latest available government statistics, as COVID-related restrictions ended.

Reports of threatening behaviour by shoppers rose to 17% of all security reports logged by Australian store staff in 2023, from 10% three years earlier, according to Auror data reviewed by Reuters. Reports of "discriminatory harassment" targeting a store worker's race or gender were up 50% over the same period.

Store theft and customer aggression are both higher, but "we are more concerned with ensuring the continued wellbeing and safety of our team", Woolworths CEO Brad Banducci said on an Oct. 25 sales call, in which he linked changing shopper behaviour with living cost pressures.

"Aggression towards our team continues and it is frankly unacceptable," added Banducci.

Gerard Dwyer, National Secretary of the Shop Distributive & Allied Employees Association, the country's main retail union, said while security technology was being upgraded it was up to the justice system to act as a deterrent by imposing tougher penalties.

"If enforced, the new tougher penalties will help businesses immensely and reduce the pressure on police," he said.

($1 = 1.5463 Australian dollars) (Reporting by Rishav Chatterjee in Bengaluru and Byron Kaye in Sydney; Editing by Praveen Menon and Christian Schmollinger)