Retail Shrinkage Addressed in Survey Released by NRF and University of Florida

Retail “shrink” that includes thefts, fraud and losses decreased to $46.8 billion in 2017 from $48.9 billion the year before.  The primary drivers of retail shrink are shoplifting and organized retail crime, according to the annual National Retail Security Survey released by the National Retail Federation and the University of Florida.

“Retailers are making progress in combating criminal activity, but there are still many challenges,” NRF Vice President of Loss Prevention Bob Moraca said in a press statement. “Whether the threat is coming from cybersecurity, organized retail crime or employee theft, the job for retail security teams continues to become more difficult every day, especially when resources and staff are limited.”

According to the report,

• Shrink as a percentage of sales averaged 1.33 percent versus 1.44 percent the year before,
• 59% of surveyed retailers indicated that it was flat or decreasing, up from 51 percent,
• Shoplifting and organized retail crime accounted for 36 percent of losses, internal employee theft was 33%, administrative paperwork errors was 19 % and vendor fraud or mistake was 6 percent,
• The greatest loss per incident was attributed to retail robberies, with an average $4,237.02 loss versus $5,309.72 the year before, followed by employee theft at $1,203.16 (down from $1,922.80) and shoplifting/ORC at $559 (down from $798.48).

The survey delved into cybersecurity for the first time, asking retailers about their role in combating cybercrime.  Two-thirds of Loss Prevention executives indicated that they hold at least quarterly meetings with their IT/cybersecurity counterparts to discuss potential threats, while 86 percent responded that they had a cybersecurity incident response plan in place.

University of Florida criminology professor Richard Hollinger authored the report in partnership with the NRF which was sponsored by retail database company Appriss Retail.  The survey contacted sixty-three loss prevention and asset protection professionals in a variety of retail sectors from March 14 to April 13.