Did you know that in 2017, US retailers faced shrink losses in excess of $42 billion, according to the latest Sensormatic Global Shrink Index study? This is almost half the global total of $100 billion across all countries surveyed. How can US retail shrinkage rates be so high, when the United States ranks in the top five countries in terms of investment in loss prevention technology?
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The global shrink study was commissioned by Tyco Retail Solutions and carried out in October 2017 by PlanetRetail RNG, a retail intelligence and advisory firm. The results, which compare the major drivers of shrink in the United States to those around the world, are explored in a feature article by Meg Costa in the July–August 2018 issue of LP Magazine. From the article:
The impact of shrink on the US retail industry is substantial, in part because of the sheer size and value of the market in this country. The rate of retail shrink in the United States—1.85 percent—is only slightly above the global rate of 1.82 percent. However, since the United States is the largest global consumer market, its total losses are much higher than any other nation. In fact, America’s retail losses of $42.49 billion dwarf those of the countries with the next highest shrinkage values—China at $13.52 billion and the United Kingdom at $7.45 billion.
In the United States and globally, fashion and accessories stores experienced the highest rate of shrink. US fashion and accessory retailers reported losing 2.43 percent of sales to shrink, which was higher than the global average for that vertical at 1.98 percent. Experts indicate that stores selling clothing, shoes, and accessories likely are more attractive to thieves, since those products are generally worth more than other verticals, such as office equipment stores, which had the lowest shrink rate.
Costa goes on to enumerate the biggest factors driving retail shrinkage rates and the role of employees when it comes to shrink in “The Worldwide Impact of Shrink.” Check out the full article to learn more.
For more great LP content, visit the Table of Contents for the July–August 2018 issue or register for a FREE print or digital subscription to the magazine. [Note: if you’re already a logged-in subscriber, the previous link will take you to the current issue instead.]