Loss Prevention Research Council Weekly Series - Episode 72 - USA 2021 Retail Shrink Survey and the Trillion Dollar Club
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
Podcast Recording August 24, 2021
When will your country recover from the pandemic?
https://www.visualcapitalist.com/when-will-your-country-recover-from-the-pandemic/
From Visual Capitalist this week an interesting summary of the recovery from the pandemic at GDP per capita by country.
China was out of the gate the fastest recovering to pre-2019 levels in Q2 / 2020. Surprising second was Turkey which recovered in Q3 / 2020.
For 2021, Lithuania was first recovering in Q1 / 2020. In Q2 / 2020, Ireland, South Korea, Russia and USA recovered. In Q3 / 2020 recovering are Chile, Finland, Japan, Latvia, Luxembourg, Norway, and Poland. Projected to recover in Q4 / 2020 are Denmark, Estonia, Germany, India, Indonesia, New Zealand, Slovakia, and Sweden. Canada recovers in Q1 / 2022. UK and Italy in Q2 / 2022. Brazil and France in Q3 / 2022.
The laggards are Spain in Q2 / 2023 and Mexico in Q3 2023 and the bottom of the list is Argentina which will not recover until Q2 / 2026.
Which companies belong to the elite Trillion Dollar Valuation Club?
https://www.visualcapitalist.com/which-companies-belong-to-the-elite-trillion-dollar-club/
Again from Visual Capitalist, from data as of August 17, 2021, number one is Apple which is valued $2.5 trillion. Number 2 is Microsoft valued at $2.2 trillion. No. 3 was Saudi Aramco valued at $1.9 trillion. Number 4 is Alphabet Google at $1.8 billion, Number 5 is Amazon at $1.8 trillion. Number 6 is Facebook at $1 trillion. Waiting in the wings with more work to do to get there are Tesla, Berkshire Hathaway, TSMC from Taiwan, Tencent from China, and VISA. Note the heavy USA presence on this list.
NRF USA Retail Security Survey 2021
https://nrf.com/research/retail-security-survey-2021
The new retail shrink survey is out from NRF and here is an audio summary.
According to executive summary from the 2021 Retail Security Survey, participating retailers said the pandemic resulted in an increase in overall risk to their organizations. It also brought new areas of prominence, as consumers had to find new ways of getting products — and criminals new channels to exploit: Buy online, pick up in store and other multichannel methods became ripe targets.
This comes as the average loss per shoplifting and robbery incident has increased. The increasingly risky environment has repercussions that extend well beyond a company’s bottom line into actual threats against employees and customers. It is increasingly clear that greater support is needed from lawmakers and law enforcement.
Yet despite the growing dangers from organized retail crime, no federal law prevents this type of activity. That leaves prosecutions — if they do occur — in a patchwork of local jurisdictions, even though the crimes are typically multi-jurisdictional and multi-state.
LP professionals and retailers are not sitting idly by while these changes occur. They have brought attention to the continuing increase in ORC, cybercrimes, and shootings and other violent incidents in malls and stores. They continue to invest in multiple resources: Half of respondents said their organization was adding technology resources and capital. And, compared with last year, there is more of a focus on hiring additional personnel.
As the long-term impacts of the COVID-19 pandemic continue to evolve, one thing is clear: The retail risk environment is more complex and more costly than ever.
Despite the many new avenues for shrink, the overall rate of shrink remained relatively steady compared with 2019. While that can be seen as good news, it is worth noting that it remains above the five-year average.
The shrink rate also seems to cut a fairly wide swath across retailers, with fewer keeping their shrink rates below 0.5%.
LP professionals have a growing list of threats on their radars. When asked what areas have increased in priority over the last five years, LP professionals were most likely to point to mall and store-related violence alongside cyber incidents and ORC.
More than two-thirds said the pandemic increased risks for their organization. Topping the list: workplace violence (61%) and organized retail crime (57%).
At the same time, almost one in five (18%) said they actually saw a slight or significant reduction in threats over the past year. Employee theft was the largest area of reduction, with one-third saying this had reduced slightly or significantly. Shoplifting also was a reduced threat for about 30 percent of respondents.
Cargo theft was the largest area in which the pandemic had no impact, with about seven in 10 reporting no change.
Not surprisingly, compared with the previous year, more than twice as many respondents reported that multichannel sales were their fastest growing source of fraud.
Overall, the average for employee apprehensions was down in 2020 compared with 2019, but about on par with 2018. Terminations were slightly lower than 2019 but maintained an overall sizeable increase since 2018. Prosecutions were at the lowest point since 2015.
The number of apprehensions, prosecutions and civil demands all fell to new lows in 2020. Apprehensions were down to 507.8 on average in 2020 from 688.8 in 2019.
About 69% of retailers said they had seen an increase in ORC activity over the past year. They cited reasons such as COVID-19, policing, changes to sentencing guidelines and the growth of online marketplaces for the increase in ORC activity.
Most alarming: Retailers report these gangs are more aggressive and violent than in years past. Some 65% of respondents noted the increase in violence, while 37% said ORC gangs were much more aggressive than in the past. For comparison, in 2019, only 57% said ORC gangs were more aggressive with 31% saying they were much more aggressive.
Half reported their organization was allocating additional technology resources and another 50% said they were allocating additional capital specifically to LP equipment. In a shift from the last few years, there was a significant increase in those reporting that they would dedicate additional staffing resources.
Pfizer Vaccine is FDA Approved! LPRC IMPACT is going Virtual! In this week’s episode, our co-hosts discuss these topics and more, including China recovers faster than other countries from COVID, Companies with Trillion Dollar Value listed out, and T-mobile Personal Information was Leaked. Listen in to stay updated on hot topics in the industry and more!
