Top 12 Insights from the 2015 Global Theft Barometer
The just published Global Retail Theft Barometer (GRTB) is an annual study of the losses from merchandise shrinkage in the global retail industry. The research
for the 2015 edition was conducted by the Smart Cube and Ernie Deyle and it was commissioned by Checkpoint Systems. 203 retailers in four regions, covering 24 countries contributed data for the latest report.
1. Global Retail Shrink
Retail shrink in the countries surveyed was estimated at $123.4 billion or on average 1.23% of retail sales. "Shrinkage has been observed to increase in most of the reviewed countries and by 0.48 pps globally. In the 16 countries where like-for-like analysis was possible, shrinkage increased in 10 and decreased in 6."
2. Global Regional Retail Shrinkage
In the 2105 study, Latin America registered the highest shrink at 1.55%, followed by North America at 1.27%, Asia Pacific (1.17%), and Europe 1.05% of retail sales. Shrinkage in retail stores increased in all regions, except Europe. LATAM had the highest increase (1.07pps), followed by North America (69pps), and Asia Pacific (0.20pps). Europe had a marginal shrink decrease of 0.06 pps.
3. Global Retail Shrink Dollars
Breaking down the total $123.39 billion in global retail shrink, Europe had the highest dollar losses at $40.88 billion, followed by Asia Pacific at $39.04 billion, North America at $36.79 billion, and Latin America at $10.80 billion.
4. The Top Three Countries with the Highest Dollar Shrink
USA was number one in the world in total dollar shrink at $36.79 billion, followed by China at $26.06 billion and Japan at $14.90 billion. Where comparable data was available, seven countries had a decrease in shrink while 10 others had an increase. Six out of the seven countries that had a decrease in shrink are located in Europe.
5. The Top Three Countries with Highest Percent Shrink
The gold medal for the highest percent of sales global shrink goes to Mexico at 1.68%, with the silver going to Netherlands at 1.48%, and the bronze to Finland at 1.38%. Apparel retailers in Mexico had the highest shrink at 2.8% of sales, a full percentage higher than the global average.
6. Top Three Highest Shrink Retail Verticals
Pharmacies / drugstores had the highest shrink at 1.99%, followed by apparel at 1.8%, and Jewelry / Watches at 1.73% of sales. Pharmacies / drugstores experienced the highest increase in shrink at 1.62 pps, followed by apparel where shrink increased 1.31 pps. Organized retail crime is one of the primary drivers identified in the survey for the increase in shrink in pharmacies / drugstores.
6. Top Three Verticals with the Lowest Shrinkage Rates
The lowest shrink rates were in pet stores at 0.48%, warehouse clubs at 0.77%, and Beauty Specialists Retailers at 0.80% of sales. Of all eleven verticals surveyed, seven had an increase in shrink.
7. Highest Retail Season for Retail Shrink
The majority of shrink occurs in the winter at 46%, followed by autumn at 24%, spring 18%, and summer at 12%. Holidays, like the ones coming up, are especially a favorite time to steal.
8. Global Retail Shrink by Source
As a percent, dishonest employee theft increased to 39% (last survey at 28%), shoplifting decreased 1% to 38%, vendor fraud decreased 6% to 7%, and administrative errors decreased 5% to 16%. Shoplifting was higher in Europe, Asia Pacific, and Latin America. Dishonest employee theft was higher in North America.
9. Highest Stolen Items
Footwear, batteries, mobile device accessories, wines & spirits, and razor blades were the highest stolen items. In second place were fashion accessories, power tools, iPad/tablets, tobacco, and cosmetics.
10. Regional Spend on Loss Prevention
The highest spend on Loss Prevention as a percent of sales was in North America at 1.55%, followed by Latin America at 1.2%, Europe at 1.07%, and Asia Pacific at .97%. The global average spend on loss prevention as a percent of sales was 1.19%.
11. Favorite Technologies Deployed Against Shrink
At store level, the top three technologies deployed to address shrink are CCTV (76% of respondents), security guards (61%), and alarm monitoring at 60%. At the product level, the top two technologies were Electronic Article Surveillance (73%) and spider wraps & keepers (44%).
12. Top Three Countries with Highest Retail Crime per Household
The country with the highest cost of retail crime per household was Finland at $868.40, followed by Hong Kong at $694.97, and USA at $615.07. The lowest retail crime cost per household was in Turkey at $74.24.
Above twelve insights affirm that global retail shrink will require increased technology innovation. It is time to further shrink the problem with new disruptive visual deterrent solutions.
---------
pps = percentage points - the unit of arithmetic difference between two percentages.
Photo source: Global Retail Theft Barometer
