Global Retail Theft Barometer Study Finds U.S. Retail Shrink Up
"Penalty" Costs Average U.S. Household $615 Annually; Dishonest Employees
Biggest Contributor; Shoplifting Remains Significant
THOROFARE, NJ - Nov. 4, 2015 -
Shrink, comprised of shoplifting, employee or supplier fraud, and administrative
errors, rose in the U.S. from 1.28 percent of sales in 2013-2014 to 1.97 percent
during 2014-2015, based upon responses from common retail respondents who
Global Retail Theft Barometer surveys both years.
Globally, this compares to 1.42 percent, a figure also up from the previous .94
percent average of all common retailers surveyed the previous year.
Retailers expressed that a range of factors, including a challenging retail
environment, caused them to implement austerity measures resulting in a
reduction of loss prevention investments. This, combined with areas of high
unemployment and limited tools to monitor internal theft and inventory
discrepancies, all contributed to an increase in their shrink.
According to the report, the annual cost of shrink to U.S. shoppers, as absorbed
or passed on from retailers, averaged $615 per household.
The study, underwritten by an independent grant from
Checkpoint Systems, Inc. (NYSE: CKP), was carried out during 2014-2015 by
The Smart Cube and Ernie Deyle, a retail loss prevention analyst. It was based
upon in-depth phone and written survey interviews conducted in 24 countries
among more than 200 retailers representing nearly $1 trillion in sales during
Seasonally, U.S. respondents said that 46 percent of their yearly losses
occurred in winter, nearly twice as much as the next season, autumn, at 24
percent. Spring (18 percent) and summer (12 percent) followed.
U.S. apparel specialists (2.28 percent), pharmacies/drugstores (2.25 percent)
and non-grocery retailers (1.9 percent) witnessed the highest shrink rates
because of the widespread prevalence of internal and external retail theft
targeting their merchandise.
In fact, while shoplifting is the biggest cause of retail shrink in 18 of the 24
countries surveyed, in the U.S., employee theft ranked first at 45 percent, with
shoplifting next at 36 percent. The primary reasons for employee theft were weak
pre-employment screening procedures, reduced associate supervision, increasing
part-time workforce (especially during peak winter periods when theft is
highest), and the easy sale of stolen merchandise.
Shoplifting continues to plague the retail industry due to escalating problem of
organized retail crime, easy sales of stolen merchandise through online sites,
reduced investments in loss prevention tools and resources, and the general
perception of shoplifting as a "low-risk/non-offensive" crime.
Shoplifters and dishonest employees in the U.S. primarily targeted small and
easy-to-conceal items such as liquor, mobile accessories, batteries, fashion
accessories and razor blades, as well as high-value items with high resale
value, such as tablets. When sorted by retail vertical, the most stolen items
included footwear (Apparel and Fashion Accessories); batteries (DIY Home
Improvement); mobile device accessories (Electronics); wines and liquor (Food
and Beverage); and razor blades (Health and Beauty).
According to Deyle, "This year's results highlight the persistent factors that
impact shrink and ultimately reduce retailers' profitability. Even if retailers
are paying more attention to all aspects of the problem, without a strong
investment in loss prevention tactics, tools and resources, they won't get the
results they'd expect. Our hope is that this report helps the industry better
understand all the complexities of the shrink problem as well as the most
cost-effective ways of addressing it."
"This is our fourteenth year of supporting what continues to be the industry's
only global statistical research," said Per Levin President of Merchandise
Availability Solutions, Checkpoint Systems. "To combat increased shrink,
retailers are adopting strategies to approach losses from a wider perspective
from all levels within the organization and work with their supplier and
solutions partners. With the right technologies, people and processes, they can
achieve improved merchandise availability, which directly impacts shoppers'
satisfaction and retailers' profitability."
During the latest reporting period, U.S. retailers that also participated in the
study in 2013 reduced their overall loss prevention spend to 0.50% of sales,
which contributed to the reported increase in shrink. Most common loss
prevention store solutions included CCTV/DVR (83 percent), alarm monitoring (78
percent), and security guards (63 percent). Most common merchandise protection
solutions deployed to prevent retail theft included electronic article
surveillance (EAS) (68 percent), spider wraps/security keepers (41 percent) and
advanced inventory control tactics (27 percent).
Interested parties can obtain a copy of the complete 135-page Global Retail
Theft Barometer report and see a video overview of the study at
http://www.GlobalRetailTheftBarometer.com. In addition, an in-depth review
of the study will be available via a webinar hosted by Loss Prevention Magazine
on November 11 at 1 p.m. EST.
Retailers wishing to participate in next year's Global Retail Theft Barometer
study may register
The Smart Cube (www.thesmartcube.com)
The Smart Cube is a global professional services firm that specializes in
delivering custom research and analytics services. The firm helps organizations
make critical decisions based on bespoke intelligence and insight. Founded in
2003, The Smart Cube has conducted more than 19,000 studies through its global
network of 500 analysts. The firm is headquartered in London and has
professionals throughout Asia Pacific, the United States, Europe, and Latin
America. Follow The Smart Cube on LinkedIn at
http://www.linkedin.com/company/the-smart-cube or on Twitter
Checkpoint Systems (www.CheckpointSystems.com)
Checkpoint Systems is a global leader in merchandise availability solutions for
the retail industry, encompassing loss prevention and merchandise visibility.
Checkpoint provides end-to-end solutions enabling retailers to achieve accurate
real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks
and reduce theft, thus improving merchandise availability and the shopper's
experience. Checkpoint's solutions are built upon 45 years of radio frequency
technology expertise, innovative high-theft and loss prevention solutions,
market-leading RFID hardware, software, and comprehensive labeling capabilities
to brand, secure and track merchandise from source to shelf. Checkpoint's
customers benefit from increased sales and profits by implementing merchandise
availability solutions to ensure the right merchandise is available at the right
place and time when consumers are ready to buy. Listed on the NYSE (NYSE: CKP),
Checkpoint operates in every major geographic market and employs more than 4700
George Cohen (for Checkpoint)
Below are some key findings from this year's Global
Retail Theft Barometer.
To download the complete study, visit
Participate in the Global Retail Theft Barometer in
Today's Special Report is sponsored by