Shrink (comprised of shoplifting, employee theft, vendor or supplier fraud, and administrative errors) cost the retail industry more than £81 billion worldwide in 2013, £2.7 billion in the UK alone, according to the latest Global Retail Theft Barometer. This represents 0.97% of all UK retailer sales, on average.
The report was carried out in 2014 by The Smart Cube and retail loss prevention analyst Ernie Deyle, based on phone and written survey interviews conducted in 24 countries among 222 retailers representing £475 billion in sales, the surveyors said.
The average cost of retail crime per person across the 24 countries surveyed, which unlike shrink is based on dishonest employees, shoplifters, fraudulent suppliers plus the cost of ‘Loss Prevention’, ranged from £46 to £338. The annual cost of retail crime to UK shoppers, as passed on from retailers, averaged £80 per person.
According to the study, shrink is down slightly in most countries. The lowest shrink rates were recorded in Norway (0.83% of retail sales), followed by Japan and the UK (0.97%). The US came in at 1.48% of retail sales, down slightly from 1.50% last year. The highest rates were recorded in Mexico and China.
Distributors VP sales UK & EMEA Russell Holland said: “Over the last year, retailers in the UK have been making great strides and investments in the fight against retail crime. Many UK retailers reported that improved security methods have helped them to keep losses under control. We’re also seeing retailers invest in their employees’ education and understanding of loss prevention, marking an encouraging step in the fight against retail crime in the UK.”
While shoplifting remains the biggest cause of all retail shrink in 16 of the 24 countries surveyed, in the UK, administrative and non-crime losses ranked first at 36.5%, with shoplifting next at 25.3%.