Retailers, consumers and prices
The recession strikes again
The recession hammered U.S. holiday sales last year and new research suggests that it also drove up ”shrink” — a retail industry term for shoplifting, employee theft, and administrative errors.
An estimated $36.5 billion was lost to “shrink” in 2008, according to preliminary findings from the latest National Retail Security Survey released today.
That figure is up from $34.8 billion in 2007, an increase of nearly 5 percent.
The survey, conducted by the National Retail Federation and the University of Florida, also showed that retail shrink averaged 1.52 percent of retail sales in 2008, up from 1.44 percent in 2007.
“Criminals have found a way to manipulate and corrupt the retail industry,” said Richard Hollinger, lead author of the report and professor of criminology at the University of Florida.
Retailers grappling with the worst recession in decades have been forced to cut spending on everything from security to labor in a bid to protect profits. That scenario ”leaves new opportunities for thieves to take advantage of companies,” Hollinger said.
According to the survey, 44 percent ($15.9 billion) of the 2008 retail losses were due to employee theft. 14 percent of those cases involved collusion with outsiders.
Shoplifting accounted for 35 percent ($12.7 billion) of the losses. Administrative error and other losses were blamed for 15 percent ($5.4 billion) of the total, while vendor fraud came in at 4 percent ($1.4 billion).
The data came on the heels of a study released June 10th on organized retail crime, in which 92 percent of retailers said they were victims of retail crime, and 73 percent said the problem was getting worse.