Retail Theft Decreases in 2010, Report Says
Fewer U.S. retailers saw their products stolen in 2010, but more than one-third of American retailers still experienced higher attempted or actual theft. The 2010 Global Retail Theft Barometer, an annual report conducted by the Centre for Retail Research that monitors shrinkage and crime in the retail industry, found global retail theft totaled $107.3 billion in 2010- a 5.6 percent decrease from the prior year when rates actually increased. In the U.S., shrink decreased 6.8 percent. 'Shrinkage' or 'shrink' is defined as stock loss from crime or waste, expressed as a percentage of retail sales.
Also see The essential retail security reader for more on retail crime and security tactics
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. 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 percent. It was 36.7 percent in the U.S..
"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 2010 study also found that retailers increased their spending on loss prevention and security by 9.7 percent over 2009, to $26.8 billion globally; in the U.S. the increase in loss prevention spending over 2009 amounted to 12.5 percent.
"The correlation between increased security spending and a global 5.6 percent 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."
Shrink cost retailers $107.3 billion during the study period, which was 1.36 percent of global retail sales - down from 1.43 percent the previous year. The country with the highest rates of shrink as a percentage of sales was India with 2.72 percent of retail sales. The lowest rate of shrink was found in Taiwan with .87 percent. The US rate was 1.50 percent.
Despite the down turn of shrink, the study found some of the most stolen items have suffered increased shrink since last year, including children's wear, outerwear, shaving products, luxury cooked meats and infant formula. Some of the highest average shrink rates were found in apparel/clothing and fashion/accessories at 1.72 percent and cosmetics/perfume/beauty supply/ pharmacy at 1.7 percent.
The report claims customer theft, including shoplifting and organized retail crime, caused the greatest shrink loss in most countries, compromising 42.4 percent of shrink, followed by employee theft at 35.3 percent. (Read more about criminal techniques in 5 top tactics in retail theft today.)
Read more about loss prevention in CSO online's Loss Prevention section.