During a recent earnings call, the chief financial officer of one of the largest retailers in the world suggested their organization might have “cried too much” in 2022 when shrink was approximately 3.5 percent of sales. This executive then went on to describe how they have managed to “stabilize” shrink by spending “a fair amount,” including deploying “incremental security” in the most recent quarter. Finally, the executive suggested that the organization was continuing to find efficiencies in their security program, and that they “have a fairly good line of sight to new programs going in.”
To summarize, all of this suggests that: (1) the organization was experiencing high levels of shrink; (2) the high level of shrink has been managed through effective programs and resource allocation; and (3) the organization is continuing to refine their strategy to continue to manage these challenges. This kind of presentation is what one would expect from a chief financial officer during an earnings call—that is, you would expect a CFO to reassure investors that the organization is being effectively managed. Despite all this, many media outlets seized on five words— “maybe we cried too much.” These words were interpreted as meaning that retail theft had been overstated, and many in the media characterized concerns about retail theft as a “moral panic.”
But do concerns about retail theft specifically, or retail crime in general, really constitute a “moral panic,” or do many (journalists included) just misunderstand the problem? More importantly, are concerns about retail crime really about retail theft, or is the public really concerned about more serious, aggressive, and brazen retail crimes? This article seeks to answer these questions. However, to determine whether the retail crime problem has been overstated or whether it might be misunderstood, we need to understand the nature of retail crime in general. It’s also important to first define our terms, beginning with ‘moral panic.”
Retail Crime: A Moral Panic?
According to sociologists, moral panics occur “when threats, dangers, or traumas are defined in a highly exaggerated manner.” Others define it as a “type of social deviance characterized by a heightened sense of threat in some segment of the population [that suddenly emerges and subsides] and [involves] a disproportionate response relative to an objectively assessed threat level.” A key element of most definitions of “moral panic” is that it includes an exaggerated characterization of a problem and a disproportionate response to the problem. Some well-known moral panics involve the satanic panic of the 1980s, concerns about violent imagery in video games, and the glorification of deviant behaviors in popular music.
Some sociologists have criticized the term “moral panic” for its ideological and value-laden nature, and because the term “moral panic” suggests that the “concern is irrational or not genuine.” In other words, the concept of a “moral panic” is problematic because the extent of a problem is dependent on subjective moral judgments. For example, some might see certain crimes as seriously and morally reprehensible, while others may not, and these perceptions can change over time. Therefore, it is impossible to determine whose moral concerns are more accurate or proportionate without using one of the groups’ standards to determine whether the extent of a social problem is being exaggerated.
Overstated or Simply Misunderstood? It’s Complicated…
Despite the problems with the concept of a “moral panic,” we can examine whether public concern seems to exceed levels of concern when there were similar or lower levels of crime. However, this requires that we have both (1) valid crime data; and (2) valid data on levels of public concern about retail crime. We will start by discussing the data on public concern about crime generally, and retail crime specifically.
Data on Public Concern About Retail Crime: Increased Worry
The Gallup organization has been tracking levels of concern about other crimes for decades. Results show that the public is increasingly concerned about crime and criminal victimization, particularly for more serious crimes such as muggings, murders, or sexual assaults. In fact, the percentage of Americans occasionally or frequently concerned about being mugged rose from 33 percent to 40 percent between 2021 and 2022. There was also an 8 percent increase in concern about being sexually assaulted, and a 7 percent increase in respondents concerned about being murdered. One very interesting aspect of the Gallup results is the increase in concern was much greater for violent crimes, such as those mentioned above, than non-violent crimes such as one’s home being burglarized while not at home, or having their car stolen or broken into. In general, the American public is increasingly concerned about more serious, violent crimes.
Unfortunately, the Gallup data is not specifically focused on retail crimes. Another approach to examining concern about retail crime is to use Google trend data. Figure 1 provides the popularity of searches relative to the peak, which in both cases occurred around the beginning of 2022. This peak was achieved after a steady rise in interest from 2020 onward, indicating that interest in retail crime generally, and organized retail crime specifically, has increased according to Google searches.
Finally, in 2022, the Loss Prevention Research Council (LPRC) conducted its ORC Across the States survey. 177 loss prevention practitioners, including multi-store managers and ORC investigators throughout the United States, participated in the survey. We initially asked respondents to identify which geographic areas in the US they served, and then asked a series of questions about organized retail crime and its consequences. When asked, “How much of a problem is fear of crime among store-level associates in the areas you serve,” approximately 72.6 percent reported that fear of crime is a moderate or major problem.
Data on Retail Crime: Metrics of Varying Validity of Retail Industry Data
Retail shrink, a key metric for most retail loss prevention teams, is an extremely poor indicator of overall retail crime for many reasons. The most important and obvious reason is because it is an imprecise metric. That is, since shrink is caused by a variety of factors, including criminal and non-criminal causes, it reflects much more than the impact of retail crime. If retailers could definitively state the proportion of shrink due solely to crime, then we would have a measure that could be used to track retail crime. Unfortunately, this is impossible.
Nevertheless, shrink is an indicator of how much merchandise retailers are losing, and retail crime is a contributing factor. The 2022 NRF National Retail Security Survey (NRSS) conducted in partnership with the LPRC was distributed to loss prevention executives representing sixty-three retailers, with the vast majority being national retailers. Results indicated that the average shrink among participating retailers in 2022 (1.4% of sales) was in line with the 5-year average (1.5% of sales). If shrink was a valid measure of the extent of retail crime (it is not), then this would suggest that retail crime remained the same. However, all other available data suggests that retail crime has not remained the same.
Retail shrink is caused by a variety of factors and only a portion of total shrink is due to criminal causes. Further, these criminal causes can be subdivided. For example, in the retail industry, offenders are often discussed in terms of opportunistic and organized retail offenders. Opportunist offenders include those who commit retail crimes when the opportunity arises—they are not necessarily seeking out or creating opportunities to commit crime in an organized and systematic manner. On the other hand, organized retail offenders systematically seek out or create opportunities to engage in retail crimes for the purpose of financial gain.
The results of the NRF’s NRSS clearly revealed that retailers are extremely concerned about organized retail offenders, and this has become an increasingly important priority for most participating retailers over the past five years. However, the population of organized retail offenders can be further subdivided into at least two broad groups.
On one hand, there are organized retail offenders and networks who are highly sophisticated, often taking a strategically non-violent approach. These individuals and networks often operate in much larger areas. For this group, violence is an unappealing strategy by bringing greater attention to their crimes. However, these organized groups also have the potential to cause massive economic harm in terms of merchandise theft and their disruption of legitimate markets.
On the other hand, there are those who are much more likely to use violence and commit crimes in a much more brazen manner. They typically operate in a much smaller, more local area, and typically less sophisticated and organized in their approach. These offenders tend to generate massive physical and psychological harms, resulting in a greater impact on human safety.
There is evidence that more serious offenses, such as organized retail crime and retail violence, are increasingly problematic for retailers. In the 2022 NRSS, results showed that guest-on‑associate violence had become a greater priority for 77.6 percent of participating executives; external theft excluding ORC had become a greater priority for 74.1 percent; and organized retail crime had become a greater priority for 70.7 percent of participants.
The NRSS also asked participants how much ORC incidents had increased at their organization between 2021 and 2022, according to their internal records. On average, retailers reported that known ORC incidents increased 26.5 percent between 2021 and 2022.
In the LPRC’s ORC Across the States survey, respondents reported that, on average, there had been a 32.9 percent increase in the number of recorded ORC incidents. When aggregated to the state level, it was clear that respondents were reporting greater increases in some states (e.g., the Northeast and Western states), than in others (e.g., the South). Unfortunately, the sample only included a small subset of all loss prevention practitioners who serve multiple store locations.
There are also other sources of data, such as official crime data. The most reported form of data consists of crimes reported to the police. For example, the Federal Bureau of Investigation’s Uniform Crime Reporting Program and National Incident-Based Reporting System consist of crimes known to police. However, many cities also publicly report the number of reported crimes for a given week or month, and typically include how that changed month-over-month.
Crimes known to police are just one type of official crime data. Others include arrests, prosecutions, or the number of incarcerated persons, just to name a few. All these types of data have problems, and it is well-known that sources of data “closer” to the crime tend to more accurately reflect the amount of crime in a given area. In the case of retail crime, retailers’ incident data will tend to include the most incidents, followed by crimes reported to police, arrests, prosecutions, etc. This is because incidents are filtered out at every stage. Only a portion of incidents are reported to police, only a portion of reports lead to arrests, only a portion of arrests lead to prosecution, etc.
Nevertheless, when most refer to official crime data, they are referring to crimes reported to police. There is a good bit of research on factors that influence whether crimes are reported to police. For example, research suggests that many engage in a cost-benefit analysis when deciding whether to report crimes. They consider the likely costs of reporting a crime (e.g., time, effort, likelihood of retaliation, etc.) and the likely benefits (e.g., property recovery, enhanced security, justice being done, etc.). If the benefits don’t exceed the costs, there is no reason to report the crime. However, there are other factors that affect whether crimes are reported to police, such as the victims’ perceptions of law enforcement, perceived severity of the crime, and the influence and encouragement of members of one’s social network.
In the LPRC’s 2022 ORC Across the States survey, we asked participating loss prevention practitioners to estimate the percentage of known retail crimes they reported to police. On average, respondents said only 50.45 percent of known retail crime incidents are reported to law enforcement in the areas they serve. Next, we asked participants why crimes are under-reported in the areas they serve. The two most cited reasons involved inaction or lack of follow-up by law enforcement and prosecutors. 80.92 percent said that crimes were not being reported to police because law enforcement will not respond, investigate, or make an arrest, while 63.4 percent reported that crime is under-reported in the areas they serve because prosecutors are unlikely to prosecute crimes.
Unfortunately, in recent years, reporting might have also declined due to law enforcement agencies’ ability to hire and retain officers. Research shows that increased law enforcement staffing levels are associated with increased crime reporting while declines in staffing levels are associated with decreased crime reporting. According to the Police Executive Research Forum’s survey of 184 law enforcement agencies, from 2020 to 2021, officer staffing levels dropped by 3.48 percent. This was due to a combination of factors, including a 20.5 percent decrease in hiring and a 40.4 percent increase in resignations, among other things. Fortunately, during 2021, hirings increased by approximately 20.8 percent and the rate of retirements has slowed down.
With this said, it’s clear from discussions with loss prevention practitioners and organized retail crime investigators that they understand how challenging the past few years have been for so many law enforcement agencies.
The FBI provides official crime data through their Crime Data Explorer up until 2021. However, retail locations are limited to convenience stores, gas stations, grocery stores, liquor stores, shopping malls, and specialty stores. Data does not include drug stores because these are categorized with doctors’ offices and hospitals. All forms of commercial and office spaces are grouped together, and retail warehouses are not distinguished from other types of warehouses. Nevertheless, Figure 2 provides the rates of property and violent crimes known to police for the specified retail sectors per 100,000 US residents.
Figure 3 indicates that property crimes known to police have declined over the past five years, while violent crimes known to police have increased. However, the linear trend line is a bit misleading because the apparent increase in violent retail crimes is primarily due to the increase in 2021. If the data for 2021 were removed, the violent crime trend would appear to be relatively flat.
Of course, Figure 3 only includes national data, and crime fluctuates differently across different cities and states. Additionally, as discussed, a large portion of the crimes known to retailers are not reported to police (nearly 50%, on average, according to loss prevention practitioners). Furthermore, we cannot be sure if the proportion of crimes reported to police fluctuates year-over-year, and, if so, how much it fluctuates. For example, if the proportion of property crimes reported to police decline, then, hypothetically speaking, the retail crime trends could appear to decline simply because of a decline in reporting among retailers.
But the problems with the official data do not stop there. According to the NRSS, in 2021 the cities and metropolitan areas that were most affected by organized retail crime included: Los Angeles, California; San Francisco/Oakland, California; New York, New York; Houston, Texas; Miami, Florida; Chicago, Illinois; Sacramento, California; Seattle, Washington; Atlanta, Georgia; and Dallas/Fort Worth, Texas.
Half of these cities and metropolitan areas did not submit any data to the FBI for 2021. In fact, 47 percent of all jurisdictions that served areas with more than 500,000 people did not submit data for all 12 months of 2021, and 35 percent of these large jurisdictions did not submit any crime data to the FBI for 2021. Moreover, of the 18,819 US agencies that could have submitted data in 2021, 59 percent did not submit data for the full year, and 38.7 percent did not submit any crime data to the FBI. With this much missing data, it becomes very difficult to determine what crime trends are, especially since the participating jurisdictions change each year. The problems with the official data are well-known among criminologists and criminal justice scholars, but others may not be familiar with these limitations.
Is retail crime overstated or misunderstood? The only answer I can give is that crime statistics and retail crime are probably misunderstood by many people, which may lead them to believe retail crime is understated. Many people are unfamiliar with the way in which official crime data is generated; therefore, they uncritically accept the statistics as they are presented. However, as discussed throughout this article, only a fraction of known retail crime is reported to police and shrink is generated by much more than crime. Therefore, these data are of questionable validity in discussions about trends in retail crime. Nevertheless, even the official data indicates that approximately 20-25 percent of all property crimes occur in retail locations each year, which seems like something the public might be justifiably concerned about. Furthermore, according to industry research, the number of ORC incidents increased in the past year by somewhere between 26.5 and 32.9 percent.
Of course, it is possible that those who refer to concern about retail crime as a “moral panic” have ideological commitments that encourage them to selectively use data that supports their positions. I know that I’m quite passionate about retail victimization and preventing it and therefore must restrain myself to ensure I’m not cherry-picking data that confirms my position. However, Hanlon suggests that we should “never attribute to malice that which is adequately explained by stupidity.” In other words, the simplest explanation is that those who refer to concern about retail crime as a moral panic are simply ignorant of the different types of retail crime, different sources of retail crime data, and the limitations of different data sources.
Finally, this article started out with a discussion about how some journalists are referring to retail theft as a moral panic. This implies the public is concerned about run- of-the-mill retail theft. There is an old saying in media: “if it bleeds, it leads.” If the retail crime problem was merely about “theft,” then I doubt that many in media would spend any time on these stories. This is not to say they wouldn’t be justified in discussing retail theft, since 20-25 percent of property crimes occur in retail spaces, and the majority of these are thefts. However, the stories about retail crime that receive the most attention are stories of retail workers being murdered, thieves sweeping shelves of product into bags and exiting stores, and retail offenders assaulting department store workers as they carry racks of clothes out of the store. Both industry data and the available official crime data suggest violent crimes in retail spaces are becoming increasingly problematic, and industry data suggests that ORC is becoming a more serious problem.
To characterize retail crime in this country as a “moral panic” is inaccurate, dismissive of much of the data, and disrespectful of the real concerns of the American public, including retail workers.
Cory Lowe, PhD is a research scientist at the Loss Prevention Research Council. He received his doctorate in criminology in 2020 from the University of Florida where he specialized in crime and delinquency prevention, communities and crime, criminological theory, and research methods and data analysis. Lowe has published in peer-reviewed journals and other scholarly publications on the causes of crime, crime and delinquency prevention, and the factors associated with substance use and delinquency. He can be reached at Cory@LPresearch.org.