Bad news for retailers ahead of the Christmas trading season – theft is on the rise and clothing stores suffer more than any others.
The amount lost to retail ‘shrinkage’ (you know, supplier fraud, employee fraud, simple ol’ fashioned shoplifting, and admin errors) was $1.234bn globally in 2014-15. It accounted for almost 2% of revenue in the US. That’s up from 1.28% of sales only a year earlier, according to the latest Global Retail Theft Barometer. Globally, the figure also jumped – from just under 1% to almost 1.5%.
Two questions spring to mind – firstly why does the US have such a problem? The survey doesn’t answer that one. But it does answer the second – why the big leap? The reasons are… High unemployment, limited tools to monitor internal theft and inventory discrepancies, and a tough retail environment that has meant retailers cutting costs and also cutting back on investment in anti-theft measures.
Whatever the causes, the annual cost of shrinkage adds up to around $615 per American household – which means either higher prices or lower retailer profits.
Interestingly, it’s interesting that retailers lose more goods to theft in the winter (46%) compared to only 24% in the autumn, 18% in the spring and a small 12% in summer.
At 2.28%, US clothing stores lose more goods to theft than any other sectors with both shoplifters and staff being to blame.
So who’s stealing the most? Interestingly around the world, shoplifting by ‘customers’ and theft by staff is roughly equal. But again, the US is slightly different with a disproportionately high percentage of stolen goods (45%) being taken by employees, compared to ‘only’ 36% by shoplifters.
And what are people stealing? Footwear is top of the list for fashion stores while razor blades are stolen most from health and beauty stores.