According to the latest Global Retail Theft Barometer, shrink – comprised of shoplifting, employee theft, vendor or supplier fraud and administrative errors – has cost the retail industry more than £81 billion worldwide in 2013 and £2.7 billion in the UK alone. This represents 0.97% of all UK retailer sales on average.
Underwritten by an independent grant from Checkpoint Systems, the research was carried out in 2014 by The Smart Cube and Ernie Deyle, a retail loss prevention analyst. It’s based on in-depth phone and written survey interviews conducted in 24 countries among 222 retailers responsible for no less than £475 billion in sales.
The average cost of retail crime per person (which, unlike shrink, is based on dishonest employees, shoplifters, fraudulent suppliers and the cost of loss prevention) across the 24 countries surveyed ranged from £46 to £338. The annual cost of retail crime to UK shoppers, as passed on from retailers, averages £80.00 per person.
Shrink appears to be down slightly in most countries. The lowest shrink rates were recorded in Norway (.83% of retail sales) followed by Japan and the UK (.97%). The US came in at 1.48% of retail sales, down slightly from 1.50% last year. The highest rates were recorded in Mexico (1.70%) and China (1.53%).
Russell Holland, vice-president of sales for the UK and EMEA distributors at Checkpoint Systems, said: “Over the last year, retailers in the UK have been taking great strides and made substantial investments in the fight against retail crime. Many UK retailers reported that improved security methods have helped them to keep losses under control. We’re also seeing retailers invest in their employees’ education and understanding of loss prevention, marking an encouraging step in the fight against retail crime in the UK.”
While shoplifting remains the biggest cause of all retail shrink in 16 of the 24 countries surveyed, here in the UK both administrative and non-crime losses ranked first (at 36.5%) with shoplifting next on the list (at 25.3%).
Stolen merchandise: the most popular items
The most-stolen items across Europe are those products that are easy to conceal and harbour a good resale value, such as fashion accessories, wines and spirits. Other frequently stolen products include power tools, mobile accessories and make-up products.
Survey respondents state that source tagging – the application of EAS or RFID labels on goods prior to their arrival at retail stores – has increased around the globe. Such tagging is currently used on high value and high theft items like meat, health and beauty products and alcohol.
80% of UK retailers are source-tagging up to 10% of products. A further 20% are source-tagging over 20% of all merchandise. In addition, 50% of European retailers plan to increase the number of source-tagged SKUs.
According to The Smart Cube: “This report provides detailed descriptions of the sources of shrink and helps retailers understand the most cost-effective ways of addressing their problems. A number of Best Practices emerged from our research, including appropriate spending ranges to address the issue.”
“We’re pleased to support this global statistical research for the thirteenth year,” said Per Levin, president and chief sales officer for shrink management and merchandise visibility solutions at Checkpoint Systems. “Our hope is that retailers can learn more about the causes of shrink and work with their suppliers and solutions partners to create joint programmes designed to reduce shrink and its associated costs.”
Interested parties can obtain a copy of the latest Global Retail Theft Barometer report by logging on at: http://www.GlobalRetailTheftBarometer.com
*Retailers wishing to participate in next year’s Global Retail Theft Barometer study may register here