Loss prevention and retail industry professionals have a responsibility to stay informed about the latest retail theft statistics. This post provides a snapshot of what retailers currently face when it comes to loss and theft challenges.
Inventory Shrink
Inventory shrinkage refers to the difference between the merchandise a retailer shows in its records and the actual physical count of merchandise on hand. This difference can be attributed to operational errors, internal loss, and/or external loss. Shrink is an inevitability in the retail environment, but loss caused by retail theft is something LP and asset protection professionals work hard to prevent.
Results from the 2018 National Retail Security Survey (NRSS), which were released just before the National Retail Federation’s (NRF) PROTECT conference in June 2018, report that inventory shrink accounted for 1.33 percent of retail sales, or $46.8 billion, in 2017. This has been a slight decrease from the from 1.44 percent ($48.9 billion) seen in 2016.
In addition, almost 60 percent of retailer participants reported that inventory shrinkage has either diminished or stayed the same in 2017. For the 2017 NRSS, on the other hand, only about half of respondents said that was the case.
The NRSS is the result of a collaborative effort with the University of Florida and has been overseen by Dr. Richard Hollinger for 25 years. The 2018 survey received responses from 63 retailers.
Shoplifters and Organized Retail Crime
Shoplifting and organized retail crime are major contributors to the external loss component of inventory shrink. The NRSS indicates that shoplifting accounted for 35.7 percent of the reported shrink in 2017, which is down from 39.3 percent in 2016. The average dollar loss per shoplifting incident in 2018 was reported as $559, which is down from 2017’s average of nearly $800. It’s still higher than the $317 average seen in 2015.
The 2017 survey marked the fourth time in a row that shoplifting has ranked as the top cause for and greatest percentage of inventory shrinkage.
The annual retail crime survey put forth by the British Retail Consortium in March 2018 reported that the direct cost of retail crime in the UK has risen to over £700 million (~$914 million), a 6 percent increase over the previous year. The overall cost of theft by customers reportedly surged by 15 percent over 2015. The BRC estimates that nearly three-quarters of the total cost of retail crime is caused by external theft.
The National Retail Federation’s 14th annual Organized Retail Crime (ORC) Survey, released in November 2018, revealed that 92 percent of the retail companies surveyed had been a victim of ORC in the previous year.
Employee Theft
Employee theft, also known as internal theft, occurs when employees steal from the organization where they are employed. Retailers that participated in the 2018 NRSS say that employee/internal theft amounted to 33.2 percent of inventory shrink in 2017, a slight increase over 2016’s 30 percent. The report also found that the average loss of dishonest employee cases decreased from $1,922.80 to $1,203.16.
Other Retail Theft Statistics
According to the Jack L. Hayes International 30th Annual Retail Theft Survey, more than 432,000 shoplifters and dishonest employees were apprehended in 2017 by 21 major retailers. These shoplifter apprehensions showed an increase of 2.3 percent over 2016, while dishonest employee apprehensions decreased nearly 4 percent over 2016. More than $188 million was recovered from the thieves—up almost 8.1 percent from 2015.
According to the report, nearly one in every 35 employees was apprehended for theft from their employer in 2017.
This article is updated regularly.