Executive Briefings

Record Losses for Retail Despite Anti-Shrinkage Tech

As retailers continue to invest in new programs and technology to combat crime in their stores, dollar losses from theft and fraud have reached an all-time high, according to preliminary results of the latest National Retail Security Survey. It found that retail shrinkage averaged 1.61 percent of retail sales last year, nearly unchanged from 1.60 percent in 2005.
Even though shrinkage as a percentage of sales stayed virtually the same, total retail losses increased last year to $41.6bn due to higher retail sales in 2006 compared to 2005. The survey, now in its fifteenth year, is a collaborative effort between NRF and the University of Florida.
"Though total retail losses continue to rise in correlation with industry sales, it is encouraging that shrinkage as a percentage of sales has stayed flat," says Richard Hollinger, lead author of the report and a criminology professor at the University of Florida. "Retailers seem to be putting a dent in the amount of criminal activity in their stores, though they acknowledge they have a lot of work left to do."
According to the survey, the majority of retail shrinkage last year was due to employee theft, at $19.5bn, which represented almost half of losses (47 percent). Shoplifting accounted for $13.3bn, or about one-third (32 percent) of losses. Other losses included administrative error ($5.8bn and 14 percent of shrinkage) and vendor fraud ($1.7bn and 4 percent of shrinkage).
Source: National Retail Federation, http://www.nrf.com

As retailers continue to invest in new programs and technology to combat crime in their stores, dollar losses from theft and fraud have reached an all-time high, according to preliminary results of the latest National Retail Security Survey. It found that retail shrinkage averaged 1.61 percent of retail sales last year, nearly unchanged from 1.60 percent in 2005.
Even though shrinkage as a percentage of sales stayed virtually the same, total retail losses increased last year to $41.6bn due to higher retail sales in 2006 compared to 2005. The survey, now in its fifteenth year, is a collaborative effort between NRF and the University of Florida.
"Though total retail losses continue to rise in correlation with industry sales, it is encouraging that shrinkage as a percentage of sales has stayed flat," says Richard Hollinger, lead author of the report and a criminology professor at the University of Florida. "Retailers seem to be putting a dent in the amount of criminal activity in their stores, though they acknowledge they have a lot of work left to do."
According to the survey, the majority of retail shrinkage last year was due to employee theft, at $19.5bn, which represented almost half of losses (47 percent). Shoplifting accounted for $13.3bn, or about one-third (32 percent) of losses. Other losses included administrative error ($5.8bn and 14 percent of shrinkage) and vendor fraud ($1.7bn and 4 percent of shrinkage).
Source: National Retail Federation, http://www.nrf.com