2018 Sensormatic Global Shrink Index Compares Shrink Rates Across 14 Countries

Global shrink rate of 1.82 percent cost retailers nearly $100 billion in 2017, according to the findings.

Tyco Retail Solutions has just released the industry’s most extensive study conducted in recent years, providing insights into the sources and impacts of global retail shrink. The Sensormatic® Global Shrink Index is a culmination of research that measures worldwide retailer performance, allowing retailers to benchmark their shrink rates to others in the same vertical and region.

Tyco commissioned global retail market intelligence provider PlanetRetail RNG to conduct the Sensormatic Global Shrink Index that included over 1,100 retail decision-makers across four regions, 14 countries, and 13 retail segments. Retailers surveyed operate over 229,000 stores, generated an estimated $1.56 trillion during 2017 – 2018, and account for 80 percent of total global retail sales. The retailers work in the world’s leading economies, which account for 73 percent of global Gross Domestic Product (GDP).

The scope and coverage of the study includes how loss prevention professionals are measured and incentivized, the technologies and services being leveraged, the top stolen items and brands, and data elements being used to monitor and predict shrink: otherwise known as a reduction in inventory due to shoplifting, employee theft or other errors, significantly impacts a retailer’s bottom line.

According to the Sensormatic Global Shrink Index, shrink cost retailers nearly $100 billion globally last year. Shrinkage across retail stores in the US accounted for 1.85 percent of sales, slightly above the global rate (1.82%). Although the country ranked ninth in terms of a percentage of sales, its position as the largest global consumer market means this translates into the highest losses based on shrinkage value at $42.49 billion of sales – almost half of the total across all country markets surveyed. Other key US findings include:

  • External theft/shoplifting, including organized retail crime (ORC), make up the most significant percentage of losses at 35.55 percent of lost sales, slightly above the global average, followed by loss due to internal shrinkage, including employee theft, at 24.54 percent.
  • After electronic article surveillance (EAS) systems, alarm monitoring is the next most popular loss prevention investment, followed by access control systems, exception-based reporting, and closed-circuit television (CCTV).
  • Fashion and accessories have the highest rate of shrink by retail vertical at 2.43 percent of sales.

“Best-in-class retailers are optimizing their physical stores by ensuring that operational controls are in place for growing problems such as retail shrink,” said Catherine Walsh, senior vice president and general manager of Tyco Retail Solutions, a global leader in data-driven loss prevention, inventory intelligence, and traffic insights. “The Sensormatic Global Shrink Index benchmarks retailer performance globally and sheds light on other factors affecting loss prevention. Knowing the state of shrink helps retailers better assess the challenges and solutions to make merchandise secure yet accessible for a better customer experience.”

The statistics contained in this report highlight the magnitude of shrink’s impact on retail and affords the opportunity to dive deeper into the sources of shrink, particularly in the US, as well as the loss prevention tools to help combat loss. To view the full report’s findings, visit the 2018 Sensormatic Global Shrink Index.

 

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