Global Retail Theft Barometer Study Finds Shrinkage Down 5.6% to 1.36% of Retail Sales or SGD140 Billion (US$107.3 Billion) Worldwide
SINGAPORE, Dec. 1, 2010 /PRNewswire-Asia/ --
Retail Shrinkage in Singapore Went Above Asia-Pacific Average at 1.17%
Total Cost of Retail Crime Still Reached SGD232 Million shared at SGD224 per Family
Increased loss prevention spending globally contributed to lower shrinkage rates
-- Shrinkage decreases 6.5% in Asia-Pacific, but almost one-quarter of Asia-Pacific & Singapore retailers still experienced higher attempted or actual theft
-- Infant formula and alcohol/liquor has the highest shrinkage in grocery stores. Fashion/tailored clothing and accessories, and health & beauty supplies like shaving products, lipsticks and glosses are the key targets of shoplifters in Asia Pacific
Global retail theft totaled SGD140 billion (US$107.3 billion) in 2010, representing a 5.6% decrease from the prior year (6.5% in Asia-Pacific), according to the fourth annual edition of the Global Retail Theft Barometer, a summary of which is available at http://globalretailtheftbarometer.com/press/.
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The study, sponsored by an independent grant from Checkpoint Systems, monitored the costs of shrinkage (loss from shoplifting/employee crimes and administrative errors) in the global retail industry between July 2009 and June 2010, and found that shrinkage decreased in all regions surveyed. The biggest decrease was in North America. The proportion of global retailers that reported increased actual or attempted shoplifting in 2010 was 31.1% (23.1% in Asia-Pacific).
"Even with the shrinkage decrease, retail crime cost the average family in the 42 countries and regions surveyed an extra SGD242 (US$186) on their shopping bill," said Professor Joshua Bamfield, Director of the Centre for Retail Research and author of the study. "In Singapore the number was SGD224 (US$172), the 3rd highest in Asia-Pacific and the amount is >30% higher than the Asia-Pacific average of SGD152 (US$117)."
Correlation Between Increased Security Spending and Decrease in Theft
The 2010 study also found that retailers increased their spending on loss prevention and security by 9.3% over 2009, to SGD35 billion (US$26.8 billion) billion globally, whereas a 6.7% increase in loss prevention spending in Asia was recorded compared to last year.
"The correlation between increased security spending and a global 5.6% decrease in theft is very significant," said Bamfield. "It highlights the importance of continued advancement and improvement of loss prevention programs, as reducing theft is key to the success and growth of retailers' businesses."
"In 2008 at the start of the economic downturn, the temptation for retailers was to reduce their loss prevention spending," commented Rob van der Merwe, Chairman, President and Chief Executive Officer, Checkpoint Systems. "This typically leads to an increase in shrink and that is what we saw with the 2009 Theft Barometer study. Retailers quickly realized the need to correct this trend and began to invest in smart deployments that could be quickly implemented with high ROIs, such as increased protection of high-theft merchandise, and more employee training and store audits. This resulted in a short-term win and a decrease in shrink."
"As we continue to slowly recover from the recession," he continued, "it is perhaps the right time to combat shrink with a more comprehensive path and begin looking to the merging technologies that will carry retailers through to the future. Examples include the newest generation of EAS and also RFID technology to additionally provide better tracking and visibility of inventory across the supply chain, leading to the elimination of out-of-stocks and increased sales."
Global Retail Shrink Rates
Shrink cost retailers SGD140 billion (US$107.3 billion) during the study period, representing 1.36% of global retail sales. This is down from 1.43% the previous year. The country/region with the highest rates of shrinkage as a percentage of sales was India (2.72% of retail sales). The lowest rate of shrink was found in Taiwan (0.87%). The shrinkage rate of Singapore at 1.17% is slightly higher than the Asia-Pacific rate at 1.16%.
Items With Increased Shrink Rates
While shrink is down overall, some of the most stolen items have suffered increased shrink since last year, including children's wear, outerwear, shaving products, luxury cooked meats and infant formula.
Shrink by Global Vertical Markets
Shrink varies according to business type, vertical market and country. In 2010, some of the highest average shrink rates were found in apparel/clothing and fashion/accessories (1.72%), and cosmetics/perfume/beauty supply/pharmacy (1.70%).
Origins of Shrink
Customer theft, including shoplifting and organized retail crime caused the greatest shrink loss in most countries at 42.4% of shrink, followed by employee theft at 35.3%.
"Although retailers have made considerable progress in introducing new anti-shrink policies, more than 25% of the retail 'top fifty' most-stolen product lines still have no specific protection," said van der Merwe. "So our industry needs to accelerate innovation to help better protect retailers and consumers."
More Asia-Pacific & Singapore Highlights on Retail Shrinkage
Loss prevention costs in Singapore (0.24% of sales) ranks the 2nd highest in Asia Pacific and is just behind Australia (0.37%), it is above the Asia Pacific average (0.19%) but still far behind global average (0.34%).
Shoplifting
-- Singapore retailers suffered 53.6% of retail shrinkage by shoplifters, amounting to an annual sum of SGD117 million (US$ 90 million).
-- The highest average rates of shrinkage were in apparel/clothing at 1.72%.
Employee theft
-- The second largest source of retail shrinkage was employee theft, at 24.4%.
The Survey
Started in 2001 in Europe and expanded in 2007 globally, the Global Retail Theft Barometer (GRTB) is an annual survey conducted by the Centre for Retail Research in Nottingham, UK and sponsored by Checkpoint Systems. This study is the largest and most comprehensive survey of retail theft and crime in the world. The study covers key trends in retail shrink and crime in 42 countries and regions across the world, including the U.S., China, India, Europe, Japan and Australia. Russia is included for the first time this year. This report has been prepared from confidential details provided by 1,103 of the largest retailers representing 233,721 stores with combined sales of SGD1,140 billion (US$873.8 billion), representing a cross-section of countries and retail vertical markets.
About The Centre For Retail Research
The fourth edition of the Global Retail Theft Barometer (tenth edition for Europe) has been produced by Professor Joshua Bamfield, Director of the Centre for Retail Research (www.retailresearch.org) with the cooperation of Checkpoint Systems, Inc. The CRR is an independent organization providing research and consultancy for the retail sector dealing with the changing face of retailing and focusing on retail fraud and crime. It has carried out extensive studies dealing with the costs of crime and the application of electronic and computerized systems to combat shop theft and fraud in many parts of the world.
About Checkpoint Systems, Inc.
Checkpoint Systems is a global leader in shrink management, merchandise visibility and apparel labeling solutions. Checkpoint enables retailers and their suppliers to reduce shrink, improve shelf availability and leverage real-time data to achieve operational excellence. Checkpoint solutions are built upon 40 years of RF technology expertise, diverse shrink management offerings, a broad portfolio of apparel labeling solutions, market-leading RFID applications, innovative high-theft solutions and its Web-based Check-Net data management platform. As a result, Checkpoint customers enjoy increased sales and profits by improving supply-chain efficiencies, by facilitating on-demand label printing and by providing a secure open-merchandising environment enhancing the consumer's shopping experience. Listed on the NYSE (NYSE:CKP), Checkpoint operates in every major geographic market and employs 5,700 people worldwide. For more information, visit http://www.checkpointsystems.com.
CONTACT:
Natalie Chan
Checkpoint Systems, Inc.
Tel: +852-2995-8350
Email: [email protected]
SOURCE Checkpoint Systems, Inc.
