Global Retail Theft Barometer Study Finds Shrink Cost Retailers $128 Billion Worldwide, Averaging 1.29 Percent of Sales

According to the results of the annual Global Retail Theft Barometer released on Thursday, losses from shrink, which includes shoplifting, employee or supplier fraud and administrative errors, cost retailers around the world more than $128 billion last year, $42 billion of which was from the U.S. alone.

Of the 22 countries surveyed, Mexico had the highest shrinkage rate, at 1.7% of total retail revenues, followed by China at 1.53% and the U.S. at 1.48%. Norway reported the lowest shrinkage rates, at 0.83%.

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North America also stood out as the region with the highest proportion of employee thefts, where this type of loss accounted for 43% of all shrinkage. By comparison, employee theft accounted for 24% of shrinkage in Latin America, 22% in Europe, and 16% in Asia-Pacific.

disgruntled employee of the month

“Dishonest and fraudulent employees were responsible for $18.01 billion by value of shrinkage,” said the report. “Key reasons of dishonest employee theft include ineffective pre-employment screening, less employee supervision, and easy sale of stolen merchandise.”

The US retailers with the highest shrinkage rates were discounters, pharmacies and drugstores, and supermarkets and grocery retailers. This was due to the widespread prevalence of organized retail crime and lower loss prevention spending for some of these merchants, the report explained.

The study was based upon in-depth phone and written survey interviews conducted in 24 countries among 222 retailers representing $744 billion in sales in 2013.

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