The National Retail Federation (NRF) revealed that theft accounted for around two-thirds (65%) of retail losses last year:
Retail crime, violence and theft continue to impact the retail industry at unprecedented levels. The effects of these criminal acts are not isolated to large national brands or large metropolitan cities. ... Theft – both internal and external –accounts for nearly two-thirds (65%) of retailers’ shrink. However, for some sectors, theft can represent more than 70% of overall shrink
"Shrink" encompass various forms of revenue decline: "Measured as a percentage of sales, shrink percentage often includes losses caused by both internal and external theft, operational or process mistakes and systemic errors."
Data from the 2023 National Retail Security Survey revealed that, in 2022, the average average shrink rate for retailers increased to 1.6% (more than $112 billion), compared to 1.4% in 2021 ($93.9 billion):
The average shrink rate in FY 2022 increased to 1.6%, up from 1.4% in FY 2021 and in line with shrink rates seen in 2020 and 2019. When taken as a percentage of total retail sales in 2022, that shrink represents $112.1 billion in losses.
Retailers seeing 'unprecedented levels' of theft
External thefts represented 36% of the losses, while another 29% were due to internal thefts, i.e. by employees. Twenty-seven percent were caused by some "errors" made by the businesses. The other 7% occurred due to "unknown causes" and "other factors."
NRF Vice President of Asset Protection and Retail Operations David Johnston stated:
Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire. Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.
Many retail stores have taken extreme measures to control the crisis of robberies and crime. Almost half (45%) of those surveyed said they had to reduce the number of stores, and 30% reduced or altered the availability of products in storefronts. Read Hayes, director of the Loss Prevention Research Council, said:
Retailers are piloting and implementing a number of loss prevention practices to deter, prevent, and mitigate these substantial losses ... in addition to enhancing traditional security measures, many are also allocating resources to innovative emerging technologies for future prevention.