7 facts about retail shrink that will blow you away…

  1. According to recent research; 68% of all retail shrink is “preventable”. (Result: Best in class companies add 50% more profit to their bottom-line than “average” companies.)
  2. According to the same study only 21% of Fraud can be post-identified if not “prevented”. (Solution: Professional Data Investigators and Analysts using the newest “transaction-level profiling” techniques can improve that rate by 16-22%.)
  3. Approx. 3.8-5.4%% of all supermarket transactions involved shrink causing activity. (Convenience store fraud rates are slightly higher.)
  4. But, of these 3.8-5.4%, shrink-loss accounted for $1.743 BILLION dollars in retail loss or an average loss of $2,198.00 per transaction.
  5. Only 28% of the shrink-causing transactions or “Cases” involved known or intentional cashier fraud or theft. (Result/Solution: Changing the habits and behaviors of the cashiers performing the other 72% of transactions will achieve dramatic shrink loss improvement – Faster than trying just to catch fraud.)
  6. 62% of the shrink-causing transactions involve store operating or merchandising “Conditions” or POS operating “Conditions” that cause store shrink or profit loss. (Most Loss Prevention does not pro-actively control these types of transactions.)
  7. Most retail Loss Prevention pros spend 25% in administrative tasks, 27% of their time in prevention/awareness initiatives, and 48% of their time investigating the “Cases” that account for only 17% of their shrink.

More Facts from the National Retail Research Group Facts:

  1. Average supermarket shrink is up 12% to 2.76% of retail sales. This increase is driven in large part by the increasing sales in perishable departments and their contribution to total store shrink.
  2. Best-in-class shrink loss rates are .97-1.47% (format impacted). The opportunity for dramatic profit improvement is huge and should be part of every companies SOX “Operations Improvement and Compliance” initiative.
  3. Average Pharmacy shrink is +.71%.
  4. Average drug store shrink (non-Rx) is 2.66%.
  5. Average Convenience store inside shrink is 3.14%.