Retail shrink cost $94.5 billion in 2021
Image from Unsplash
Organized retail crime (ORC) increased across retail organizations, with retail shrink costing businesses $94.5 billion in losses in 2021.
Retail shrink, when taken as a percentage of total retail sales in 2021, accounted for $94.5 billion in losses last year, or an overall shrink rate of 1.44% — a decrease compared to the last two years, according to the National Retail Federation (NRF). The 2022 National Retail Security Survey, which was released by NRF and surveyed 63 retail leaders and security executives, found that organized retail crime, a critical component of that shrink, is a growing challenge both for retailers and the industry at large.
According to the survey, the majority of retailers report that in-store, e-commerce and omnichannel fraud have risen. Violence is a growing area of concern and retailers are prioritizing addressing guest-on-associate violence, external theft and ORC. Retailers reported a 26.5% increase in ORC, on average.
The COVID-19 pandemic created more challenges for retailers. A large majority (87.3%) of respondents said the pandemic resulted in an increase in overall risk for their organization. Retailers specifically cited an increase in violence (89.3%), shoplifting (73.2%), ORC and employee theft (tied at 71.4%) as a result of the pandemic.
Retailers are prioritizing new resources to safeguard their customers, employees and operations, with 44.5% indicating loss prevention as an area of investment. Sixty percent of respondents are increasing their technology budget, and 52.4% are increasing their capital and equipment budget. As part of these efforts, many are investing in various technologies, including radio-frequency identification (RFID), computer vision at point of sale and license plate recognition.
For more report information, click here.
Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!
