Study Finds Retail Theft Reached Sgd 160 Billion (us$115 Billion) World-wide

< BACK TO FINANCE starstarstarstarstar   Business - Finance Press Release
10th November 2009, 11:52pm - Views: 926





Business Finance Checkpoint Systems, Inc. 1 image

Business Finance Checkpoint Systems, Inc. 2 image









MEDIA RELEASE PR37008


Study Finds Retail Theft Reached SGD 160 Billion (US$115 Billion) World-Wide


HONG KONG, Nov. 10 /PRNewswire-Asia-AsiaNet/ --


    -- Recession and reduced loss prevention spending lead to largest increase 

       in shrink since study's inception


    -- Global shrink average rises by nearly 6% reaching 1.43% of retail sales


    -- Cost of theft/ honest tax equal to an average of US$169.9 (SGD 236) per 

       family in Singapore


    -- Apparel theft in accessories and fashion clothing reached 3.85% of 

       sales, while meat theft in Supermarkets hit 3.38%


    -- Shrinkage in Singapore was US$ 170 million (SGD 236 million), which was 

       equivalent to 1.19% of retail sales


    The level of global retail theft reached US$114.8 billion (SGD 160 billion) in 2009,

representing a significant increase of 5.9%  over last year's total of $104.5 billion

(SGD 145 billion), according to the third edition of the Global Retail Theft Barometer.

The study monitored the costs of shrinkage and crime in the global retail industry

between July 2008 and June 2009, and found that the rise in shrink occurred in all

regions surveyed, with the greatest increase in North America (+8.1%), Middle East-

Africa (+7.5%), Europe (+4.7%) and Asia Pacific (+4.2%).




    In Singapore, shrinkage represented 1.19% of retail shrinkage as US$170 million (SGD

236 million). 


    "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 author of the study. "Many have also noted a change in the type of offender and in

the type of products stolen." 


    "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, Chairman, President and CEO of

Checkpoint Systems, Inc., the sponsor of the study. "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."


     "The 2009 study also found that retailers decreased their spending on loss

prevention and security by US$900 million (SGD 1.3 billion), no doubt in response to

their general need to trim budgets in tough times," continued Professor Bamfield.

"However, the correlation between US$900 million (SGD 1.3 billion) in decreased security

spending and a US$10 billion (SGD 14 billion) increase in theft is very significant. It

highlights the importance of continued advancement and improvement of loss prevention

programs, as reducing theft is key to the success and growth of retailers' businesses."


    Loss prevention spending in 2009 was equivalent to an average of 0.31% of retail

sales.


    Global Retail Shrinkage Rates 


    Compared to last year's survey, the losses of retailers in the 12-month period year

ending June 2009 rose in 38 out of the 41 countries surveyed. Shrinkage, as a percentage

of retail sales rose by 5.9 percent this year to a global average of 1.43%. This is a

significant departure from the previous two years, in which shrink as a percentage of

retail sales decreased. 


    While North America and Europe make up 40% and 38.4%, respectively, of global

shrinkage, the highest country-specific rates were found in India, Morocco and Mexico

and the lowest in Hong Kong, Taiwan and Austria.


    "Although there are commentators that view retail crime as a harmless or intriguing

social phenomenon or simply as a 'cost of doing business', this ignores the impact of

the cost of retail crime to the general public, which, in 2009 cost 553 million families

in the 41 countries surveyed an extra US$208 (SGD 289) on their shopping bill," said

Professor Bamfield.


   

In Singapore, the honest tax imposed to each family as a result of retail crime was

US$ 169.9 (SGD 236).


    Shrinkage by Global Vertical Markets


    Shrinkage varies according to business type, vertical market and country. In 2009,

some of the highest average shrinkage rates were found in apparel/clothing and

fashion/accessories (1.84%) or cosmetics/perfume/beauty supply/pharmacy (1.77%). 


    In apparel/clothing and fashion, the highest shrinkage losses were seen in

accessories (3.85%) and in fashion/tailored clothing (3.64%). These product groups

suffered the highest shrinkage in all regions surveyed (North and Latin America, Europe,

Asia-Pacific and Middle East-Africa).  A little difference was that footwear was also

one of the high-risk product lines in Asia Pacific, which accounted for 1.61% of

shrinkage rate.


    For food items/groceries, the highest shrinkage was reported in fresh meat with

3.38%, which is two and a half times more than the global shrinkage rate of 1.36% for

foodstuff. Luxury cooked meats also reached a high shrinkage rate of 2.72%.  High-

quality seafood was the top high-risk product lines in Asia Pacific, which accounted for

2.13% of shrinkage rate.


    Global Cost of Retail Crime


    In the 2009 edition of the survey, the global costs of retail crime (the charge that

crime imposes on retailers) was US$120.5 billion (SGD 167) including loss prevention

costs. It is made up of shoplifting losses (40.5 percent), employee theft (33.8

percent), supply chain losses (5.3 percent) and loss prevention costs (20.3 percent).


    While shrinkage has increased, security spending has decreased almost everywhere. In

more mature markets, such as North America and Europe, loss prevention expenditure tends

to be higher than in emerging markets. In North America, loss preventing spending

represented 0.40% of retail sales, a fall of US$811 million (SGD 1.1 billion) from 2008.

In Europe retailers spent an equivalent to 0.29% of retail sales compared to 0.34% in

2008


    In Asia-Pacific the average for security spending was 0.17%.  It is the lowest among

all the regions surveyed.


    "It is interesting to note that spending on security systems and equipment fell by a

much greater amount than spending on outsourced security personnel," commented Bamfield.

"While a combination of several approaches to security is most effective, there are

definite advantages to increase the effectiveness of personnel by employing a

comprehensive shrink management solution and strong loss prevention processes.    


    In Singapore, the security spending reached US$33 million (SGD 46 million) (0.23% as

percentage of sales) which was the 2nd highest in Asia Pacific, though the figure was

still lower than the global average of 0.31%.


    Merchandise Theft


    Merchandise theft reached a total of US$64.51 billion (SGD 89.6 billion) in 2009.

The amount of merchandise stolen by shoplifters and employees represents 72% of the

total shrinkage. Most merchandise was stolen by shoplifters, who were responsible for

US$48.8 billion (SGD 67.8 billion) of stolen goods. It is here that loss prevention can

have its greatest impact by deterring would-be shoplifters and enabling merchandise

recovery. 


    Economic Recession Impact


    "There is some criminological evidence that crime rises as unemployment rises and

there are indications that crime is a much more important issue for retailers now than

two or three years ago," said Professor Bamfield.


    "Some offenders may otherwise face real hardship. People whose family income has

fallen because of unemployment or work-sharing may feel that they need to steal in order

to maintain their previous lifestyle. The failure of the financial system and the

political class in many countries has disillusioned many people, who may feel that they

have to look after their own interests - however illegally - because no one else can be

trusted to do so," continued Bamfield. 

  

    The survey shows that shrinkage and offending have increased over the past year, and

that retailers attribute one-third of increased shoplifting, and a little more than one-

fifth of increased employee theft, to the recession.  "It seems that the pattern of

offending has altered. This is likely to be truer of shoplifting than of employee theft

as employees are more eager to retain their jobs when there are fewer jobs available,"

said Bamfield.  


    Most Vulnerable Merchandise


    Thieves tend to focus on small and easily-concealed, expensive, branded items that

have considerable popular appeal and are easily re-sellable: electronic games/Wii,

DVDs/entertainment, iPods/MP3 players, clothing, cosmetics/face creams/perfumes,

alcohol, fresh meat/expensive foodstuffs, which appear most frequently on the list of

most vulnerable merchandise. Other most-stolen products are razor blades/shaving items,

mobile/cell phones and watches.


    Apprehension of Thieves


    The number of shoplifters and employee thieves apprehended by retailers amounted in

2009 to 5.8 million - the size of many countries - an increase of 500,000 compared to

the previous year. This increase may be due in part to the overall increase in crime. Of

those apprehended, 85.6% were shoplifters and 14.4% employees.


    In Asia Pacific, the average amount stolen or admitted by shoplifters was US$69.27

(SGD 96). The average employee theft was US$376.15(SGD 523) compared to US$1,889.02 (SGD

2,626) of global figure.


    Loss Prevention and Innovation


    "The recession makes loss prevention a more difficult task, but also more

important," said Per Levin, President, Shrink Management Solutions, Checkpoint Systems.

"While 5.8 million theft-incidents were stopped and nearly US$6 billion (SGD 8 billion)

in stolen merchandise was recovered in 2009, it was not enough to keep shrinkage from

spiking. But there are still quick wins available. For example, 28 percent of products

that are most attractive to thieves remain unprotected. We have seen significant

innovation taking place in the industry, and there are new and effective solutions

available today, from comprehensive product protection strategies to state-of-the-art

shrink management systems. When brought together in a holistic fashion they can help

retailers protect their businesses and prepare for profitable growth" 

Business Finance Checkpoint Systems, Inc. 3 image


    "With numerous studies supporting the conclusion that investing in and focusing on

Loss Prevention  decreases retail shrink, we hope this year's Global Retail Theft

Barometer provides the data retailers need to support their loss prevention efforts,"

concluded Professor Bamfield. 


    The Survey


    Started in 2001, the Global Retail Theft Barometer (GRTB) is an annual survey

conducted by the Centre for Retail Research in Nottingham, UK and sponsored by

Checkpoint Systems. This study is now the largest and most comprehensive survey of

retail theft and crime in the world. 


    The Study covered 1,069 corporations with total revenue of US$ 822 billion (SGD

1,143 billion). Respondents to the questionnaire included 201 corporations in North

America (combined sales of US$292 billion (SGD 406 billion)), 567 from Europe (US$452

billion (SGD 628 billion) sales), 196 from Asia-Pacific (US$59 billion (SGD 82

billion)), 67 from Latin America (US$15 billion (SGD 21 billion)) and 38 from Middle

East Africa (US$4 billion (SGD 5.6 billion)). 


    The new countries included in the study this year are China (Shanghai, Beijing,

Guangdong and Hong Kong SAR), Morocco, Taiwan and Turkey. 


    About The Centre For Retail Research


    The third edition of the Global Retail Theft Barometer (ninth edition for Europe)

has been produced by Professor Joshua Bamfield, Director of the Centre for Retail

Research ( http://www.retailresearch.org ) with the cooperation of Checkpoint Systems,

Inc. The CRR is an independent organization providing research and consultancy for the

retail sector dealing with the changing face of retailing and focusing on retail fraud

and crime. It has carried out extensive studies dealing with the costs of crime and the

application of electronic and computerized systems to combat shop theft and fraud in

many parts of the world.


    About Checkpoint Systems, Inc.


    Checkpoint Systems is a global leader in shrink management, merchandise visibility

and apparel labeling solutions. Checkpoint enables retailers and their suppliers to

reduce shrink, improve shelf availability and leverage real-time data to achieve

operational excellence. Checkpoint solutions are built upon 40 years of RF technology

expertise, diverse shrink management offerings, a broad portfolio of apparel labeling

solutions, market-leading RFID applications, innovative high-theft solutions and its

Web-based Check-Net data management platform. As a result, Checkpoint customers enjoy

increased sales and profits by improving supply-chain efficiencies, by facilitating on-

demand label printing and by providing a secure open-merchandising environment enhancing

the consumer's shopping experience. Listed on the NYSE (NYSE:CKP), Checkpoint operates

in every major geographic market and employs 3,900 people worldwide. For more

information, visit http://www.checkpointsystems.com .


    For additional information, please contact:


     Natalie Chan, Asia Pacific Marketing Director

     Tel:    +852-2995-8332

     Email:  Natalie.chan@checkpt.com


SOURCE: Checkpoint Systems, Inc.




To view this and other AsiaNet releases please visit http://www.asianetnews.net






news articles logo NEWS ARTICLES
Contact News Articles |Remove this article