2017 Shrink Cost U.S. Retailers $42.49 Billion, 1.85% Of Sales
2017 Shrink Cost U.S. Retailers $42.49 Billion, 1.85% Of Sales
Global retail shrink led to losses of $99.56 billion in calendar 2017, according to the Sensormatic Global Shrink Index compiled by Tyco Retail Solutions and PlanetRetail RNG. U.S. shrink generated losses of $42.49 billion, accounting for 1.85% of retail sales, slightly above the global average of 1.82%.
The National Retail Federation and the University of Florida also analyzed U.S. shrink trends by interviewing 63 loss prevention and asset protection professionals from a variety of retail sectors. This study found that shrink averaged 1.33% of sales in 2017, down from 1.44% the year before. A total of 59% of those surveyed said that shrink was flat or decreasing, up from 51% in 2016. In comparison, 41% of respondents claimed shrink was growing, down from 49%.
The Sensormatic report surveyed 1,120 professionals from retailers in 14 countries that collectively operate more than 229,000 stores. Shrink rates in the U.S. varied by retail sector, with the highest level, 2.43%, experienced by fashion and accessories stores. Other U.S. retail segments with high levels of shrink included:
Convenience Stores: 2.05%;
Home, Garden and Auto Stores: 2.05%; Drug Stores, Pharmacies and Perfumeries: 2.03%; and
Variety Stores: 1.95%.
“Fashion merchandise is always in high demand and items are usually relatively higher priced, which means a bigger lure for criminals and ultimately a greater loss for retailers when stolen,” said Kim Warne, VP of Marketing and CMO at Tyco Retail Solutions. “Loss due to the shrink in fashion and accessory stores amounts to $4.12 billion globally.”
She suggested using video surveillance as the foundation for loss prevention and enhancing the system with tools such as fire and intrusion security systems and remote monitoring. Additionally, EAS labels and tags, cart containment systems and RFID can help retailers analyze what is being taken and develop additional safeguards against loss. The newest tool for foiling criminals is monitoring social media to “eavesdrop” on plans for theft. retailtouchpoints.com
