Loss Prevention Research Council 172 - Retail Returns Totals, Holiday Retail Violence, and USA Store Closures
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
2023 Consumer Returns in the Retail Industry
https://nrf.com/research/2023-consumer-returns-retail-industry
Let me start this new year with the latest report from the NRF and Appriss Retail on the 2023 USA Consumer Returns in the USA Retail Industry.
- Total returns for the retail industry amounted to $743 billion in merchandise in 2023.
- The total returns rate as a percentage of sales for 2023 is 14.5%.
- The percentage of abuse and fraud impacting total returns in 2023 is 13.7%.
- The total amount of dollars lost to returns abuse and fraud in 2023 is $101 billion.
This last stat on abuse and fraud is interesting as it come close to total retail shrink with in the latest NRF / LPRC totaled $112 billion.
For the retail holidays:
- Retailers expect fewer returns of holiday sales this year, with an expected return rate of 15.4%.
- Retailers expect fraudulent and abusive returns to increase to 16.5% of returns in 2023.
- The trends in fraud and abuse are magnified during the holiday season as increased traffic puts pressure on staff to prioritize transaction speed over process and procedure.
In 2022, retailers allowed 22.1% of returns to be accepted without a receipt. This number has dropped by half in 2023.
Survey data also estimates that 17% of non-receipted returns are fraudulent, an increase from 14% in 2022.
Non-receipted returns have been a significant focus for retailers because fraud and abuse rates are expected to be higher in this category.
2023 Holiday ORC and Crime Reporting – December 23 through December 31
http://d-ddaily.com/2ndpage/1-3-24_holiday-retail-crime.htm
Switching topics, some interesting statistics from D&D Daily on Organized Retail Crime and Retail Fatalities for the 2023 holiday season. The data is based on published reports between December 23 through December 31 in the United States
In that timeframe
- There were 28 retail fatalities which were up 87%
- 25 Organized Retail Crime Cases which were up 67%
- Finally there were 104 reported robberies and burglaries which were down 15%.
Alarming the increase in both retail fatalities and organized retail crime this holiday season.
120,000 retail jobs lost in 2023
https://www.retailgazette.co.uk/blog/2024/01/retail-jobs-lost-2023/
Switching topics again, let me now travel across the pond and report on the status of retail in the UK.
According a report published in the Retail Gazette, more than 10,000 shops closed down in 2023, with almost 120,000 retail jobs lost according to figures from the Centre for Retail Research.
The figures showed a total of 119,405 retail jobs were lost and 10,494 stores shuttered during the period.
Store closures were down 38.8% compared to 2022 – retail’s worst year for store closures since 2008 – while the number of redundancies in 2023 fell by 21.3%.
However, Centre for Retail Research director Professor Joshua Bamfield noted: “This ‘improvement’ is probably best viewed as a trend that is ‘less bad’ rather than ‘good’ and doesn’t reflect any real strength in the sector.”
The research foundation said 2023 saw a continuation of the trend started in 2022 where most store closures and retail jobs lost were caused by company reorganisation and cost cutting programmes rather than business failures.
Retailers shuttered 4600 stores this year: here are the stores that disappeared
https://www.cbsnews.com/news/retailers-closed-4600-stores-chains-with-the-most-closures/
Coming back to the United States, let’s look at the latest reporting on store closures and openings for 2023 as reporting by CBS News.
This year was a rough one for some major retailers, as illustrated by an 80% surge in store closures in 2023 from the year before, according to Coresight Research.
The reasons for this year's more than 4,600 store closures are varied, ranging from the bankruptcy of a major retail chain to some operators closing underperforming locations. In some cases, retailers blamed rising theft for their rationale in closing some locations.
Against the backdrop of the closures are several trends weighing on some brick-and-mortar businesses. For one, Americans continue to shift to online shopping. And secondly, inflation-wary shoppers are cutting back on some types of purchases, such as electronics and jewelry.
But it's not all doom and gloom in the retail sector, given that retailers actually opened almost 5,500 stores in 2023, more than offsetting the number of closures this year, Coresight's data shows. In some cases, retailers moved into locations vacated by other businesses.
"Some of our best stores were created from carved-up Kmart or Sears locations," Burlington Stores CEO Michael O'Sullivan said earlier this year, according to a local CBS affiliate. Burlington has taken over more than 40 former Bed Bath & Beyond spaces.
Looking forward to seeing many of you next week at NRF 2024.
