LP Magazine

JUL-AUG 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

Issue link: http://digital.lpportal.com/i/1004777

Contents of this Issue


Page 40 of 68

THE WORLDWIDE IMPACT OF SHRINK I n the United States and around the globe, shrink continues to be a challenge for retailers, especially as competition grows, profit margins constrict, and the availability of quality employees becomes increasingly limited. Retail companies in the US have been hit especially hard by shrink in the last five years, but technology is helping brands combat both internal and external theft. Shrink cost US retailers an incredible $42.49 billion last year, according to the latest Sensormatic © Global Shrink Index study. US losses account for almost half of the total $100 billion in losses across all nations surveyed—a reality that has a significant impact on retail companies, employees, and shoppers alike. The study found that US retailers are more likely to be plagued by external theft and shoplifting than internal theft. When comparing verticals, fashion and accessory retailers had the highest rate of shrink. While the US is in the top five countries in terms of investment in LP technology, the survey suggests there is room for improvement—even for those that already account for shrink in their business models. "Controlling shrink is critical to the profitability of any retailer," said Mike Keenan, CPP, CFI, LPC, managing director of retail loss prevention at TAL Global, an international security-consulting and risk management firm. "If you are able to reduce shrink, you're bringing back real dollars to the bottom line." Tyco Retail Solutions commissioned the global shrink study, which was conducted in October 2017 by PlanetRetail RNG, a global retail intelligence and advisory firm. The online survey included more than 1,100 retail decision makers across four regions, fourteen countries, and thirteen retail segments. The retailers surveyed operate more than 229,000 stores and generated an estimated $1.56 trillion from 2017 into 2018, accounting for 80 percent of total retail sales worldwide. The Global Leader The impact of shrink on the US retail industry is substantial, in part because of the sheer size and value of the market in this country. The rate of retail shrink in the United States—1.85 percent—is only slightly above the global rate of 1.82 percent. However, since the United States is the largest global consumer market, its total losses are much higher than any other nation. In fact, America's retail losses of $42.49 billion dwarf those of the countries with the next highest shrinkage values—China at $13.52 billion and the United Kingdom at $7.45 billion. In the United States and globally, fashion and accessories stores experienced the highest rate of shrink. US fashion and accessory retailers reported losing 2.43 percent of sales to shrink, which was higher than the global average for that vertical at 1.98 percent. Experts indicate that stores selling clothing, shoes, and accessories likely are more attractive to thieves, since those products are generally worth more than other verticals, such as office equipment stores, which had the lowest shrink rate. Mike Keenan USA $42.49 BILLION LATIN AMERICA $3.99 BILLION Dishonest Employee Theft Admin/Noncrime Loss Supplier Fraud Shoplifting 21% 18% 25% 36% 24% 18% 29% 29% 21% 23% 29% 27% EUROPE $29.05 BILLION 23% 17% 22% 38% ASIA PACIFIC $24.04 BILLION Global Retail Shrink Distribution, USD Losses by Region GLOBAL SHRINK $99.56 BILLION 40 JULY–AUGUST 2018 | LOSSPREVENTIONMEDIA.COM

Articles in this issue

Links on this page

Archives of this issue

view archives of LP Magazine - JUL-AUG 2018