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2016 National Retail Security Survey Key Findings

The 2016 National Retail Security Survey (NRSS) based on 2015 data from retailers was released at the recent National Retail Federation (NRF) PROTECT Conference held in Philadelphia. Now in its twenty-fifth year, the NRSS continues to be the bellwether survey that retail loss prevention executives use to compare themselves to other retail chains.

This year’s NRSS survey was conducted during April 2016 in collaboration with the NRF. The full text, charts, and findings are available at

If your company is currently a member of the NRF, you can immediately download the survey by logging on with your member ID. If you are not a member, you can register yourself and then download the survey.

- Digital Partner -

Following is a brief overview of the key findings of the research study. You can review all of these results on the survey PDF. Any questions can be directed to Bob Moraca, vice president of loss prevention at the NRF, at moracar (at) nrf (dot) com or to me.

  • The impact of shrinkage on the retail industry continues to be sizeable. With an average shrink rate of 1.38 percent, this cost the overall US retail economy $45.2 billion in 2015. While the shrinkage percentage is identical to last year’s study, the dollar impact has increased due to the growth in retail sales. The good news is that the shrinkage percentage reported during the past two years is the lowest ever observed in the history of the NRSS.
  • Overall inventory shrink increased 48.1 percent for the retailers surveyed. While this may seem counterintuitive to the increase in dollar losses, nearly half of major retailers seem optimistic in their efforts to lower shrinkage. One could conclude that leveraging technology is beginning to pay off on the bottom line.
  • LP budgets remain flat as a percentage of sales. Unfortunately, most retail executives are still not satisfied with the resources they are being given to fight the war against retail loss. Nevertheless, the total number of LP personnel per $1 billion in sales did increase slightly from 32.47 in 2014 to 37.5 in 2015. As expected, most of the employment additions were in exempt positions; non-exempt employees declined slightly.
  • Most retailers continue to rely on LP professionals to apprehend shoplifters. More than two-thirds of those surveyed said they limit apprehensions to trained LP personnel. The liability and physical risks of using sales personnel to make shoplifting stops is still too great to justify.
  • For the second year in a row, shoplifting has slightly surpassed employee theft as the greatest cause of inventory shrink. The number of apprehensions without referrals and shoplifting prosecutions dropped slightly, while the number of shoplifting-related civil demands increased significantly. You may recall that until last year previous NRSS data indicated that dishonest employees comprised the largest share of the shrinkage problem. The growth in organized retail crime (ORC) has obviously changed this situation.
  • The average loss was $377 per shoplifting incident, up nearly $60 from 2014. Despite huge ORC cases, the average shoplifting case continues to be relatively small in dollar loss. The amateur shoplifter continues to be a major problem in causing retail loss.
  • The average loss from dishonest employee cases dropped from $1,547 to $1,234. While this is good news, the number of employee apprehensions increased. Prosecutions, terminations, and civil demands for these types of internal incidents dropped. Prosecution is apparently still too expensive to justify a criminal justice response.
  • Many hiring practices retailers use to deter dishonest employees dropped. Only the use of credit checks and workers’ compensation claims increased. It appears that checking backgrounds of employees is still a questionable and controversial tool.
  • Technology is increasing in use as a shoplifting deterrent, but some of the more advanced methods, such as facial recognition and RFID, are still not catching on in levels expected when introduced. Leveraging technology is still the best countermeasure to deter shoplifting, but not all can be justified using ROI.
  • Methods of increasing LP awareness in the workforce are changing somewhat. Newsletters, periodic programs, and lectures increased while training videos and discussions during new-hire orientation decreased. There is little doubt that some of these communications are being transmitted by social media.
  • When it comes to shoplifting deterrents, the more visible, the better. The use of uniformed guards is up, while the use of plainclothes detectives is down. Visible CCTV still provides a deterrent to both amateur and professional shoplifters.
  • Robberies are a growing expense for retailers, costing on average $8,170 annually. Armed robberies are a troubling form of violent crime that still occur regularly, especially in urban areas where drug trafficking is a problem.

Only eighty retail chains responded to the NRSS this year, down twenty from the previous year. While this decreasing number is disturbing, it is likely due in part to the shrinking number of retailers in business. As retail firms merge or go out of business, inevitably the survey will have fewer and fewer respondents.

Men’s and women’s apparel was the most robust segment of responding retailers. Grocery and discount stores continue to be well represented. However, to increase the value of the NRSS in the future, more retail chains must be convinced to participate in this valuable study. Please remember this when you are asked to participate next year.

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