Report: Retail theft up almost 6% around the globe
Thorofare, N.J. The Center for Retail Research announced Tuesday the results of its Global Retail Theft Barometer 2009, which found that total retail shrink worldwide was up 5.9% over last year’s theft numbers.
According to the third annual report, which measures key trends in retail shrinkage and crime in 41 countries and regions, global shrink costs retailers $114.8 billion, an average of 1.43% of global retail sales. Last year, total theft was $104.5 billion.
Average shrinkage rates increased most in North America, or 8.1%. In the United States, shrink rose by 8.8% to reach 1.61% of retail sales. The highest increases in shrink rates were experienced in Slovakia (9.8%) and South Africa (8.2%).
The survey found that the highest shrink rates were apparel/clothing and fashion/accessories (1.84%), followed by auto parts/hardware/building materials (1.83%) and cosmetics/perfume/beauty supply/ pharmacy (1.77%). The lowest rates were in liquor, wine, beer/off-licence (0.79%); footwear/shoes/sports goods and sporting goods (0.82%); and toys and games/hobby and craft (0.90%).
“Retailers attribute one third of the increase in shoplifting to the economic recession,” said professor Joshua Bamfield, director of the Centre for Retail Research and author of the study. “Many have also noted a change in the type of offender and in the type of products stolen.”
“While most businesses have suffered as a result of the recession, few have been as hard-hit as the retail industry,” said Rob van der Merwe, chairman, president and CEO of Checkpoint Systems, the sponsor of the study. “While retailers have had to cut budgets in most areas, this year’s study shows the adverse effect of cutting spending too deeply in the area of loss prevention. Prudent spending in this area can have a very positive effect on bottom-line numbers, and act as a force-multiplier, especially as budgets for training programs and security personnel are reduced.”
The 2009 study also found that retailers decreased their spending on loss prevention and security by $900 million, causing the study’s authors to correlate the increases in theft to the cuts in security.
The global cost of retail crime (the charge that crime imposes on retailers) was $120.5 billion including loss-prevention costs. It is made up of shoplifting losses (40.5%); employee theft (33.8%); supply chain losses (5.3%); and loss-prevention costs (20.3%).
Merchandise theft reached a total of $64.51 billion in 2009 (July to June). The amount of merchandise stolen by shoplifters and employees represents 72% of the total shrinkage. Most merchandise was stolen by shoplifters, who were responsible for $48.8 billion of stolen goods.
“There is some criminological evidence that crime rises as unemployment rises and there are indications that crime is a much more important issue for retailers now than two or three years ago,” said Bamfield.