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Dive Brief:
- Signaling a rise in retail theft costs, the 2022 National Retail Security Survey from the National Retail Federation found that retail shrinkage made up $94.5 billion in losses in 2021, an increase from $90.8 billion in 2020.
- Among the top five U.S. cities affected by organized retail crime over the past year were Los Angeles, San Francisco/Oakland, New York City, Houston and Miami. The report also found that clothing, health and beauty, electronics/appliances, accessories, footwear, home furnishings, home goods and home improvement items were the top categories targeted by organized retail crime groups.
- Almost half (44.5%) of retail respondents said they will invest in loss prevention. About 60% said they are increasing their technology budget, and more than half (52.4%) of respondents said they are allocating more funds to their capital and equipment budgets, according to the report.
Dive Insight:
Previous reports have shown that shrinkage has fluctuated over the past few years. A 2018 PlanetRetail RNG report found that shrinkage cost retailers $100 billion globally in 2017. The following year, the NRF released a report indicating that shrinkage losses solely in the U.S. came in at $50.6 billion in 2018 then rose again to $61.7 billion in 2019.
Though retailers said they plan to spend more on loss prevention, the NRF report suggests that inventory shrink may have decreased on average. The average inventory shrink in the fiscal year 2021 was 1.4%, down from 1.6% in 2020 and 2019.
As for where the shrink occurs the most, respondents said that more than a third (37%) of shrinkage was external theft, including organized retail crime. The report found that retailers attributed more than a quarter (28.5%) of shrinkage to employee internal theft or process and control failures (25.7%).
“The factors contributing to retail shrink have multiplied in recent years, and ORC is a burgeoning threat within the retail industry,” NRF Vice President for Research Development and Industry Analysis Mark Mathews said in a statement. “These highly sophisticated criminal rings jeopardize employee and customer safety and disrupt store operations. Retailers are bolstering security efforts to counteract these increasingly dangerous and aggressive criminal activities.”
via https://www.aiupnow.com
Tatiana Walk-Morris, Khareem Sudlow
