Interviews
Worldwide thefts cost retailers US $104 billion annually - Survey
13 Nov '08
8 min read
Most Vulnerable Merchandise:
"Another interesting fact revealed in the survey is that retailers on average provided no specific protection for almost one-third (30.3%) of their top fifty most-stolen product lines," continued van der Merwe. "This represents an immediate opportunity for improvement. As the recession increases pressure on shrink, we are partnering with retailers to help solve their biggest challenges. Most of them see the need to improve their shrink management programs and it is critical to develop a targeted approach for the most vulnerable products to protect their bottom lines in 2009."
Thieves are remarkably consistent in their choice of goods, regardless of geographic region, favoring merchandise such as razor blades/shaving products, cosmetics/face creams/perfumes, alcohol, fresh meat/expensive foodstuffs, infant formula, CDs and DVDs, fashion, electronic games, cellular phones and watches.
Retailers estimated that on average they lost between 2% and 5% of new product lines to theft. Popular products such as the Harry Potter books, electronic games, and recent DVDs reached loss levels of up to 8%, causing supply shortages.
Loss Prevention and Impact of EAS Technology:
Global loss prevention costs were $25.47 billion or 0.33% of retail sales, a decline from last year's 0.35%.
Electronic article surveillance (EAS) was the main method of protecting high-theft items (used for 38.3% of product lines). Other means of protection included keepers/safers, display in locked cabinets or locked shelves, cables or loop alarms, and dummy cartons or ticket systems (4.1%).
North American and Latin American retailers had higher loss prevention costs as a percentage of sales (0.43%) compared to their counterparts in other regions, and were more likely to utilize EAS technology.
EAS was used in North America and Latin America for 43.5% of vulnerable lines, compared to 36% in Europe and 31.3% in Asia-Pacific/Africa. EAS source tagging was used on 13.7% of vulnerable lines in North America and Latin America, compared to 7.9% in Europe and 3.6% in Asia-Pacific/Africa.
"We hope retailers will use this year's Global Retail Theft Barometer as a tool to better understand current global shrink trends," concluded van der Merwe. "During a weak economic climate, shrink is more likely to increase, so it is even more important for retailers to remain vigilant in the fight against shrink. Our goal in sponsoring this report is to help the retail industry and loss prevention professionals formulate new and more advanced responses to combat shrink in an ever-changing global economy."
The Survey:
A total of 212 corporations in North America (combined sales of $328 billion), 502 from Europe ($416 billion sales), 131 from Asia-Pacific ($52 billion), 57 from Latin America ($14 billion) and 18 from Africa ($3.3 billion) responded to the questionnaire sent to 3,900 major retailers covering all major types of retail business in the 36 countries surveyed.
"Another interesting fact revealed in the survey is that retailers on average provided no specific protection for almost one-third (30.3%) of their top fifty most-stolen product lines," continued van der Merwe. "This represents an immediate opportunity for improvement. As the recession increases pressure on shrink, we are partnering with retailers to help solve their biggest challenges. Most of them see the need to improve their shrink management programs and it is critical to develop a targeted approach for the most vulnerable products to protect their bottom lines in 2009."
Thieves are remarkably consistent in their choice of goods, regardless of geographic region, favoring merchandise such as razor blades/shaving products, cosmetics/face creams/perfumes, alcohol, fresh meat/expensive foodstuffs, infant formula, CDs and DVDs, fashion, electronic games, cellular phones and watches.
Retailers estimated that on average they lost between 2% and 5% of new product lines to theft. Popular products such as the Harry Potter books, electronic games, and recent DVDs reached loss levels of up to 8%, causing supply shortages.
Loss Prevention and Impact of EAS Technology:
Global loss prevention costs were $25.47 billion or 0.33% of retail sales, a decline from last year's 0.35%.
Electronic article surveillance (EAS) was the main method of protecting high-theft items (used for 38.3% of product lines). Other means of protection included keepers/safers, display in locked cabinets or locked shelves, cables or loop alarms, and dummy cartons or ticket systems (4.1%).
North American and Latin American retailers had higher loss prevention costs as a percentage of sales (0.43%) compared to their counterparts in other regions, and were more likely to utilize EAS technology.
EAS was used in North America and Latin America for 43.5% of vulnerable lines, compared to 36% in Europe and 31.3% in Asia-Pacific/Africa. EAS source tagging was used on 13.7% of vulnerable lines in North America and Latin America, compared to 7.9% in Europe and 3.6% in Asia-Pacific/Africa.
"We hope retailers will use this year's Global Retail Theft Barometer as a tool to better understand current global shrink trends," concluded van der Merwe. "During a weak economic climate, shrink is more likely to increase, so it is even more important for retailers to remain vigilant in the fight against shrink. Our goal in sponsoring this report is to help the retail industry and loss prevention professionals formulate new and more advanced responses to combat shrink in an ever-changing global economy."
The Survey:
A total of 212 corporations in North America (combined sales of $328 billion), 502 from Europe ($416 billion sales), 131 from Asia-Pacific ($52 billion), 57 from Latin America ($14 billion) and 18 from Africa ($3.3 billion) responded to the questionnaire sent to 3,900 major retailers covering all major types of retail business in the 36 countries surveyed.
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