NRF: Retail loss ‘shrinks’ in 2017
Retailers are making progress when it comes to fighting criminal activity and lowering their shrink rates.
Thefts, fraud and losses from other retail “shrink” decreased to $46.8 billion in 2017 from $48.9 billion the year before, according to the annual National Retail Security Survey released today by the National Retail Federation and the University of Florida.
According to the data, shrink averaged 1.33% of sales, down from 1.44% the year before. A total of 59% of retailers surveyed said shrink was flat or decreasing, up from 51%. Only 41% said shrink was growing, down from 49%.
“Retailers are making progress in combating criminal activity, but there are still many challenges,” NRF VP of loss prevention (LP) Bob Moraca said. “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.”
Shoplifting and organized retail crime continued to be the leading causes, accounting for 36% of losses. This was followed by internal employee theft (33%), administrative paperwork errors (19%) and vendor fraud or mistake (6%).
The most substantial losses per incident came from retail robberies, at an average $4,237.02 each (down from $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).
For the first time in the survey, retailers were asked about their role in combating cybercrime. Two-thirds of LP executives said they meet at least quarterly with IT/cybersecurity counterparts to discuss potential threats, and 86% said their companies have a cybersecurity incident response plan in place.
Cybersecurity concerns are top-of-mind for retailers today as criminals continue to become more sophisticated in this area,” said Richard Hollinger, a veteran University of Florida criminology professor and the lead author of the report. “This is a growing threat that will require more resources going forward. Retail executives need to invest more in loss prevention to reduce these losses to their bottom line.”
Tuesday Morning steps up security efforts
Tuesday Morning isn’t taking any chances when it comes to the performance of its security solutions.
The retailer used to operate its own central station to monitor its alarm systems. Through its partnership with ADT however, Tuesday Morning relies on the provider to convert all systems and monitor both intrusion detection and fire alarm panels, where applicable.
Taking the partnership one step further, Tuesday Morning has entered into a new extended service plan with the provider. Now ADT manages all of the retailer’s security solutions, as well as installs and services the company’s IP-based video systems, according to the retailer.
Tuesday Morning has also adopted ADT’s eSuite Account Management tool which helps the company streamline the administration of their security solutions from a single secure portal or any connected mobile device. The retailer can view data, modify schedules, view tests, incidents, alarms and service calls — while providing audit trails and reporting for compliance, according to Tuesday Morning.
The retailer is also part of ADT’s 1Touch program, administered out of its National Account Operations Center. This entitles Tuesday Morning to a dedicated project manager and a support team.
“Their professional monitoring stations provide us with greater peace of mind that our stores, our associates, and our guests are well protected,” said Sanford Siegel, Tuesday Morning’s senior manager of loss prevention and safety.
Costco to raise minimum wage
Coscto Wholesale Corp. is giving its employees a boost as the battle to attract workers in a tight labor market intensifies.
The warehouse club giant on Friday said it will raise its minimum wage from $13 to $14, effective June 11. Company CEO Richard Galanti revealed the news in the chain’s quarterly earnings call with investors, saying about 130,000 employees will benefit from the hike. Others will see raises between 25 and 50 cents per hour when the new rate takes effect.
Galanti said the increase is expected to cost between $110 million and $120 million annually. However, due to the new GOP tax law, Costco expects a 7% drop in its tax rate.
Earlier this year, Walmart announced that it would raise starting wages for its hourly employees from $9 to $11. And in March, Target Corp. said it is raising its minimum hourly wage to $12 this year, starting with existing associates, with the move part of the retailer’s previously announced initiative to raise the minimum wage to at least $15 an hour by 2020.