Study finds retail crime up 8 percent in North America

New data from the 2009 Global Retail Theft Barometer, conducted by the Center for Retail Research, indicates that retail crime is up 8 percent in North America, which is noted by the researchers as the highest increase in the world. What's more poignant for retailers is that the average thieving employee in North America stole nearly $1,900 per incident. In North America, the study found that 44 percent of all retail theft losses stemmed from employee theft.

For the study, the researchers sourced over 1,000 retailers comprising a group that had total revenue of $822 billion.

The study estimates that shrink has risen by 6 percent globally and has reached a level where shrink totals 1.43 percent of retail sales. The worst hit areas are clothing/apparel (3.85 percent of sales) and meat theft at supermarkets (3.38 percent).

"Retailers attribute one third of the increase in shoplifting to the economic recession," noted Professor Joshua Bamfield, Director of the Centre for Retail Research and study author. "Many have also noted a change in the type of offender and in the type of products stolen."

While crime is up, spending on security for the queried retailers was down. Retailers in North America spent $811 million less than the previous year on loss prevention. Those expenditures represent 0.4 percent of their retail sales. In Europe, retailers spend even less percent of sales on loss prevention and have decreased spending from 2008 to 2009. In 2009, the European percentage of sales spent on loss prevention was 0.29 percent, down from 0.34 percent in 2008.

Globally, loss prevention is still big business. The surveyed retailers reported a total of $120.5 billion spent on retail crime (which includes the costs of loss prevention efforts). Loss prevention costs represented 20 percent of that number, with highest expenses being from shoplifting itself (41 percent), followed by employee theft (34 percent).

"While most businesses have suffered as a result of the recession, few have been as hard-hit as the retail industry," said Rob van der Merwe, the chairman, president and CEO of Checkpoint Systems, the study's sponsor. "While retailers have had to cut budgets in most areas, this year's study shows the adverse effect of cutting spending too deeply in the area of loss prevention. Prudent spending in this area can have a very positive effect on bottom-line numbers, and act as a force-multiplier, especially as budgets for training programs and security personnel are reduced."