Retailers lost $112.1 billion to retail crime in FY22, up 19.4 per cent from the previous year, according to a National Retail Federation (NRF) survey.
Appriss Retail sponsored the NRF’s 2023 National Security Survey in partnership with the Loss Prevention Research Council. The study surveyed 177 retail brands that accounted for $1.6 trillion of retail sales in FY22.
The survey noted that internal and external thefts are to be blamed for nearly two-thirds of retailers’ shrink, with the average shrink rate increasing to 1.6 per cent.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” said David Johnston, VP for asset protection and retail operations at NRF.
“Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.”
More than 67 per cent of the participants said they witnessed more violence and aggression from organized retail crime (ORC) perpetrators, as compared to the previous year, with the crime highly affecting Los Angeles, San Francisco/Oakland, Houston, New York and Seattle.
About 28 per cent of the retailers said they were forced to close a specific store location, while 45 per cent claimed they needed to reduce hours due to retail crime. Around 30 per cent said they had to reduce or alter in-store product selection due to retail crime. Just this week Target said it would close nine stores due to unacceptable levels of crime impacting staff and turnover.
In addition, more retailers opted for a hands-off approach in apprehending shoplifters amid an increase in violence among perpetrators. A total of 41 per cent said that they do not have employees authorized to stop or apprehend shoplifters.
Amid higher losses attributed to retail crime, retailers have also started adopting technologies to help prevent such incidents.
The survey said that 34 per cent of retailers have increased internal payroll to support their risks, while 46 per cent have heightened the use of third-party security personnel.
A total of 53 per cent said they have increased their technology and software solution budgets, and 54 per cent have increased or are increasing employee workplace violence training.
“Retailers are piloting and implementing a number of loss prevention practices to deter, prevent and mitigate these substantial losses,” said Read Hayes, director at the Loss Prevention Research Council.
“In addition to enhancing traditional security measures, many are also allocating resources to innovative emerging technologies for future prevention.”
