OPERATIONS

Survey: The products—and brands—most likely to be stolen from stores are…

BY Marianne Wilson

Shrink costs U.S. retailers a staggering $42.49 billion during 2017-2018.

That’s according to the 2018 “Sensormatic Global Shrink Index” from Tyco Retail Solutions, which found that the most likely to be stolen from U.S. stores included clothing, cosmetics, jewelry and confectionery, as well as consumer electronics. The brands targeted the most included Guess, Gap, Revlon, Apple (and Beats), Samsung and Sony.

U.S. fashion and accessories stores had the highest rate of shrink by retail vertical, the survey found. Office equipment stores had the lowest.

Tyco commissioned global retail market intelligence provider PlanetRetail RNG to conduct the report, which included over 1,100 retailers across 14 countries representing the world’s leading economies and 13 vertical markets. They operate over 229,000 stores. On a global scale, shrink cost retailers nearly $100 billion globally last year.

Shrinkage was highest in the U.S. at 1.85%, of sales during 2017-2018, while Europe (1.83%) ranked second.

Key U.S. findings include:

• External theft/shoplifting (including organized retail crime) make up the most significant percentage of losses, at 35.55% of lost sales, slightly above the global average. Internal shrinkage (24.54%), including employee theft, was the second largest source of losses, followed by vendor and supplier losses (21.47%).

• The average value of each ORC incident in the USA during 2017-2018 was $1,401.68 (or $131.72 more than the global average). Other external incidents, including shoplifting, amounted to $89.80 (or $16.86 more that the global average) compared to all other countries surveyed. Internal sources, including employee theft, were worth $12.75 more in the USA, at $71.75, compared to the rest of the world.

• After electronic article surveillance (EAS), alarm monitoring is the next most popular loss prevention investment, followed by access control systems, exception-based reporting and closed-circuit television (CCTV).

• The country ranked fifth for overall shrink, but has the highest shrink dollars based on being the world’s largest economy.

• Fashion and accessories have the highest rate of shrink by retail vertical, with shrinkage as a percentage of revenue coming in at 2.43%. Convenience stores and home, garden and auto stores had a rate of 2.05%, followed by drug stores, at 2.03%.

• The sector with the lowest amount of shrink (as a percentage of revenue) was office equipment, at 1.26%.

“Best in class retailers are optimizing their physical stores by ensuring that operational controls are in place for growing problems such as retail shrink,” said Catherine Walsh, VP and general manager, Tyco Retail Solutions. “The Sensormatic Global Shrink Index benchmarks retailer performance globally and sheds light on other factors affecting loss prevention.

To view the full report’s findings click here.

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