Retail sees loss of $41.6 billion in '06

San Diego According to a survey by the National Retail Federation and the University of Florida, total retail losses increased last year to $41.6 billion due to higher retail sales in 2006 compared to 2005. However, the survey also found that retail shrinkage averaged 1.61% of retail sales last year, nearly unchanged from 1.60% in 2005.

“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,” said Dr. 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 hit was due to employee theft, at $19.5 billion, which represented almost half of losses (47%). Shoplifting accounted for $13.3 billion, or about one-third (32%) of losses. Other losses included administrative error ($5.8 billion and 14% of shrinkage) and vendor fraud ($1.7 billion and 4% of shrinkage).