Thefts from retailers and other inventory “shrink” grew to $48.9 billion in 2016 from $45.2 billion the year before even as budget constraints left retail security budgets flat or declining, according to the annual National Retail Security Survey by the National Retail Federation and the University of Florida. The thefts amounted to 1.44 percent of sales, up from 1.38 percent.
“Retailers are proactive in combatting criminal activity in their stores but acknowledge that they still have a lot of work left to do,” NRF Vice President of Loss Prevention Bob Moraca. “The job is made much more difficult when loss prevention experts can’t get the money they need to beef up their staffs and resources. Retail executives need to realize that money spent on preventing losses is money that improves the bottom line.”
According to the report, 48.8 percent of retailers surveyed reported increases in inventory shrink, while only 16.7 percent said it remained flat. Shrink was divided into shoplifting and organized retail crime (36.5 percent), employee theft/internal (30 percent), administrative paperwork error (21.3 percent) and vendor fraud or error (5.4 percent).
Shoplifting continued to account for the greatest losses with an average of $798.48 per incident, up from $377 in 2015. Part of the increase came because some states have raised the threshold for crimes to be considered a felony, meaning that only larger thefts are reported. But the rise was also attributed to retailers allocating smaller budgets for loss prevention, leaving them with fewer security staff to fight the thefts.