Most shrink occurs in cosmetics and beauty supply, clothing, and auto parts and building materials, respectively. The lowest rates were in liquor and beer, electronics, and sporting goods. Vendor fraud accounted for less than five percent of shrink in North America.
Stores that specialize in certain items like electronics, beer, or sporting goods are often smaller with less area to protect than a Wal-Mart for example and have lower shrinkage rates, according to GRTB 2011.
Globally shrink increased almost seven percent over the past year to more than $119 billion, a figure that now represents 1.45 percent of global retail sales, according to the report. The country with the lowest shrinkage rate was Taiwan (.91 percent of retail sales). The highest was India (2.38 percent).
Another global trend says Bamfield, is that thieves tend to steal branded merchandise. “A retailer in Italy will have exactly the same complaints [as one] in Boston, Massachusetts, so it’s become relevant around the world,” he said. That said, regions still have their problem items. In the U.S., infant formula is stolen in large quantities, but this is less of a problem elsewhere. In Latin America and Asia, medical equipment is often stolen. And in Northern Italy a lot of Parmesan cheese is stolen, Bamfield says.
Shrinkage is lower now than it was at the beginning of the last decade, but it went up again after the recession when many companies had to make cuts to their loss prevention teams. After seeing shrinkage rise again, retailers began to implement new countermeasures. The overall shrinkage trend is downward though, Bamfield said. “What retailers are doing seems to be having an effect.”
photo by davithiel/flickr