Theft’s Global Reach
Retail theft reached $104.5 billion — equivalent to 1.34 percent of sales — in 2008, according to the Global Retail Theft Barometer, an annual survey conducted by the Centre for Retail Research in Nottingham, England.
The Centre has been studying retail theft, fraud and shrinkage in the U.K. and Europe for several years, but only last year expanded the scope to address a global range of retailing environments. One result of including retailers in Latin America, Asia-Pacific and Africa was a finding that shrinkage is a universal problem and that there was not much variation in the types of merchandise thieves seemed to favor — newer products in categories like video games and DVDs, along with the traditional health and beauty care items, perfume, cosmetics and brand-name apparel.
It also exposed survey questions to competing sets of social mores and cultural interpretations, notes Centre director Joshua Bamfield. In North America and Latin America, for instance, employee theft constitutes a larger share of retail shrinkage than it does in the rest of the world. While the figures are provided by LP managers and in some cases may represent “best estimates” rather than hard data, Bamfield says the North American anomaly in shoplifting versus employee theft is likely caused by a combination of two factors:
Retailers in the U.S. and Canada “know what to do about shoplifting,” whereas merchants in other parts of the world may not be so well versed in the area of theft-prevention in the front of the store. The challenge for North American retailers, then, is to look inward, but “it’s much more difficult dealing with employee theft.”
Retailers in other countries, with the possible exceptions of Australia and Iceland, more readily accept theft by employees, he says, so it goes under-reported. Even among European retailers, where employee theft has been rising, they “have closed their eyes” to the practice.
In Japan, where merchants “put things out on the sidewalk first thing in the morning and, if they’re unsold, expect them to be there at the end of the day,” the shrink rate is 1.01 percent of sales, lowest among the countries surveyed. Conversely, with a rigid social stratification (or caste) system and theft of inexpensive goods by members of the lower strata frequently overlooked or tolerated, India has the highest rate of shrink (3.1 percent).
The worldwide scope of the study also reflects the growing trans-border activity of professional thieves — sometimes trained in one country, active in another and re-selling the stolen merchandise in a third.
Sponsored by Checkpoint Systems, the study reports on retail shrinkage and theft in 36 countries, where it “amounts to a hidden tax on consumers who are already dealing with strain on their tightening household budgets during the economic downturn,” says Rob van der Merwe, president and CEO of Thorofare, N.J.-based Checkpoint Systems.
