Global Retail Theft Barometer finds U.S. shrink down 6.8%
Thorofare, N.J. Global retail theft totaled $107.3 billion in 2010, representing a 5.6% decrease from the prior year (6.8% in the United States), according to the fourth annual edition of the Global Retail Theft Barometer.
The study, sponsored by an independent grant from Checkpoint Systems, monitored the costs of shrink in the global retail industry between July 2009 and June 2010, and found that shrink decreased in all regions surveyed, with the biggest decrease was in North America. Still, the proportion of global retailers that reported increased actual or attempted shoplifting in 2010 was 31.1% (36.7% in the United States).
“Even with the shrink decrease, retail crime cost the average family in the 42 countries surveyed an extra $186 on their shopping bill,” said Professor Joshua Bamfield, director of the Centre for Retail Research and author of the study. “In the U.S., that number was $422.68, a phenomenal figure.”
The survey found that North American retailers are different from the rest of the world in regarding employee theft as their greatest shrink problem, causing 43.7% of shrink. The second largest source was shoplifting at 35%. Some 47.8% of U.S. retailers reported that they experienced increased losses from organized retail crime (ORC). The highest average rates of shrink in the United States were in cosmetics/perfume/beauty supply/pharmacy (1.88%); auto parts/hardware/building materials retail (1.75%); and apparel/clothing/fashion and accessories (1.69%).
Shrink cost retailers $107.3 billion during the study period, representing 1.36% of global retail sales. This is down from 1.43% the previous year. The country with the highest rates of shrink as a percentage of sales was India (2.72%). The lowest rate of shrink was found in Taiwan (0.87%). The U.S. rate was 1.50%.
The 2010 study also found that retailers increased their spending on loss prevention and security by 9.7% over 2009, to $26.8 billion globally; in the United States the increase in loss prevention spending over 2009 amounted to 12.5%.
“The correlation between increased security spending and a global 5.6% decrease in theft is very significant,” said Bamfield. “It highlights the importance of continued advancement and improvement of loss prevention programs, as reducing theft is key to the success and growth of retailers’ businesses.”