the global retail theft barometer 2007

November 2007

THE FIRST WORLDWIDE SHRINKAGE SURVEY

Ist Worldwide Shrinkage Survey

� The Global Retail Theft Barometer is the most extensive survey of shrink

ever undertaken

� It is the first worldwide survey

� The survey was carried out by the

Centre for Retail Research, led by Professor Joshua Bamfield

� The objective is to give retailers comparative information about the

shrink situation at a global level


� A survey that responds adequately to the global nature of the retail business today

� An opportunity to benchmark across different regions, countries and sectors

� A chance to Identify trends in specific regions of the world

and try to understand the differences and similarities in the data revealed

Why Global?




� 3.600 questionnaires were sent out to Loss Prevention

Managers in 32 countries around the world (Europe, U.S.,

Canada, Australia, India, Japan, Singapore and Thailand)

� 820 retail companies

� 138.603 stores

� Retailers taking part represented 16% of total European retail

sales turnover, 13% of North American retail sales and 5% ofretail sales in Asia Pacific

� Satisfactory response rate of 22.8%

The GRTB in numbers…



29.285 M.€31.931 M.€

11.208 M.€

Total global shrinkage 72.424 M. €

� Countries with the

highest shrinkagerates: India, Thailandand U.S.

� Austria, Switzerland

and Iceland had the

lowest rates

Costs by Countries


Consumers

The overall cost of retail crime (stock loss from

retail plus the costs of loss prevention)

represented an annual ‘tax’ on honest consumers

in EUROPE of:

168,51 € per household

(Global cost per household: 208,25 €)


Shrinkage Rates

� One-half of the 32 countries suffered increased shrinkage between 2006 and 2007,

although Asia-Pacific retailers reduced

shrinkage by 4.6%

� Globally, the average shrinkage rate

increased by 1.5 %


Global Sources of Retail Shrinkage

Global Source of Shrinkage 2007 Global Sources of Shrinkage 2007 (M€)


Internal Theft

� 30.9 % of internal losses suffered by retailers occurred at

the check-out

� 36.5 % in the back office, stockroom, or delivery bay

� 32.6 % on the sales floor


Security Costs –Internal and Customer Theft

Customer Thieves Employees Thieves

NumberAmount Stolen per incident Number

Average Amount Stolen (€) per indident Totals

NORTH AMERICA 1.635.687 459,5 € 663.555 1.230,76 € 2.299.242

Percentages

customers/employees 71.4% 28.06% 100%

EUROPE 3.481.490 82 € 69.015 3.778 € 3.550.505

Percentages customers/employees 98.1% 1.9% 100%

ASIA-PACIFIC 108.720 40 € 10.929 151 € 100%

Percentages customers/employees 90.9% 9.1% 100%

GLOBAL TOTALS 5.225.897 198 € 743.499 1.443 € 5.969.396

Percentages

customers/employees 87.5% 12.5% 100%

Retailers apprehended 6 million store thieves


Global Costs of Retail Crime

Cost of Retail Crime:

The cost of theft by customers, disloyal employees,

suppliers and vendors plus the cost of loss prevention.

NORTH AMERICA 36.098 M€

EUROPE 32.417 M€

ASIA-PACIFIC 10.771 M€


Most Stolen Items

Top 5 Merchandise

N. America Europe Asia-Pacific

1 Cosmetics & Skincare Alcohol Alcohol

2 Ladies' Apparel Cosmetics & Skincare Cosmetics & Skincare

3 Perfumes & Fine Fragrances

Ladies' Apparel Ladies' Apparel

4 AlcoholPerfumes & Fine

FragrancesPerfumes & Fine Fragrances

5 Designer Apparel Razor BladesHigh Cost & Specialty Food

(e.g. meat, cheese, seafood)


Security Costs

SecurityCosts

Revenue Capital

NORTH AMERICA 9.379 M€ 6.487 M€ 2.892 M€

EUROPE 7.821 M€ 5.271 M€ 2.550 M€

ASIA - PACIFIC 1.592 M€ 948 M€ 644 M€

GLOBAL LOSS PREVENTION WORLD

18.792 M€ 12.706 M€ 6.086 M€


Retailers Using Source Tagging Technology

Percentage retailers using source tagging technology (%)

Source Tagging was used by 39.8% of retailers

45,2%

39,7%

27,4%


EUROPE

� 25 countries of Western Europe and

Central Europe took part

� The number of European retailers

participating was 489

� 43.276 stores


Main Figures in EUROPE

� Shrinkage cost European Retailers a total of

29.285 M€

� This year shrinkage has started to rise

� The increase cost 454 M€ more than last year.

� For consumers, the shrinkage rate represented a

cost equivalent to 61,95 € per head in Europe


INTERNAL ERROR 4.689 M€ (16,0%)

SUPPLIERS 2.019 M€ (6,9%)

Sources of Retail Shrinkage in EUROPE

CUSTOMERS 14.188 M€ (48,5%)

EMPLOYEES 8.389 M€ (28,6%)

29.285 M€ total Shrinkage


Retail Shrinkage in EUROPE

�The lowest shrinkage rates occurred in Austria (0,94%),

Switzerland (0,96%) and Iceland (1%).

�The highest identified shrinkage rates were found in theBaltic States (1,42%), the Czech Republic (1,41%) and

Greece, Slovakia and Hungary (all 1,36%).

WESTERN EUROPE

27.081 M€CENTRAL EUROPE

2.204 M€TOTAL EUROPE

29.285 M€


Total Global Retail Shrinkage


Cost of Retail Crime in EUROPE

Customer Crime

EmployeeCrime

Thefts by Suppliersand losses in thedistribution

Security LossPrevention

14.188 M€ 8.389 M€ 2.019 M€ 7.821 M€

Total Cost of Retail Crime

32.417 M€


Percentage of Retailers Using Source Tagging Technology

� The percentage of large

European retailers in the survey

using Source Tagging was

39.7%

� Within the next two years a

further 29.6% of large retailers

expected to introduce it


Most Stolen Items in EUROPE

1 Alcohol

2 Cosmetics and Skin Care

3 Womenswear

4 Perfumes and fine fragrances

5 Razor Blades

6 DVDs and CDs

7 Childrenswear

8 Accessories

9 Designerwear

10 High cost and specialty food


Learning Points. The survey reveals…

� The cost of retail crime had a significant impact on the global economy in 2007

� 98,630 Million$, 1.36% of retail turnover

� The sources of shrink are diverse, internal theft is growing

� 2007: 42% external shrink – 35.2% internal shrink (European average for internal shrink in 2006: 30.7%)

� By the end of the decade, the majority of the world’s retailers will be using Source Tagging

� 65.3% already use it, or will do so in the next two years

� The most-stolen merchandise was very similar worldwide

� 1st: Cosmetics & Skincare, 2nd: Alcohol, 3rd: Ladies’ Apparel

� Lower rates are the outcome of strategy, policy and investment, not of factors related to the national environment

� 50% of countries suffered increased shrinkage throughout different regions, 50% saw improvements

the global retail theft barometer 2007

Documents

worldwide survey

increased shrinkage

average shrinkage

global sources of shrinkage

total global shrinkage

retail research

retail companies

retail business