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Loss Prevention

Dr. Hollinger shares preliminary NRSS findings

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When it comes to retail loss prevention, Dr. Richard Hollinger is a veteran. Since he began conducting the National Retail Security Survey 20 years ago, Dr. Hollinger has learned more about retail shrinkage than, well, probably anyone else in the field.

While the numbers will not be finalized until later this summer, Hollinger released preliminary findings this morning from the 124 companies who have responded to the survey. Among the results:

  • Shrinkage cost the retail industry $37.14 billion last year, or 1.58% of total retail industry sales. Shrinkage is divided into employee theft (43.7%), shoplifting (32.6%), administrative error (12.9%) and vendor fraud (5.4%). The remaining shrinkage resulted from unknown causes.
  • Companies say that 18.7% of employee theft cases involve collusion between internal and external sources.
  • Retailers with lower-than-average shrink include office supply stores, home furnishings stores, and entertainment and media gaming stores. Retailers with higher-than-average shrink include supermarket and grocery stores, specialty accessories stores, and furniture stores. (Much of grocery stores’ shrinkage comes from spoilage, Dr. Hollinger said, which is not an issue that many traditional retailers have to deal with.)
  • The shrink numbers from drug and pharmacy stores doubled over last year. Why? Hollinger said he isn’t sure, but speculates that organized retail crime and theft of prescription drugs like Oxycontin might play a role.
  • Loss prevention executives are getting support from the top to combat the significant losses from theft and fraud. According to the survey, 46% of retailers said their loss prevention budgets were increasing while another 35% said they were staying the same.