Videos of brazen shoplifting incidents have help turned retail theft into a national issue. But the retail industry’s own statistics on so-called shrink cast doubt on their claim that the problem is ballooning, CNN reports.
Researchers say retailers may be blaming theft for losses when the cause isn’t really known. Indeed, the CFO of Walgreens recently said “maybe we cried too much” about theft.
Shrink is an “issue where you’ve got a problem, but there’s no way to know exactly where the losses are coming from,” Richard Hollinger told CNN. Hollinger, a retired professor of sociology and criminology at the University of Florida, launched the retail industry’s first annual security survey in the early 1990s.
According to the National Retail Federation’s (NRF) annual survey of about 60 retail member companies, shrink is a “rapidly ballooning issue.” In 2021, retail shrink hit $94.5 billion, up only 4 percent from 2020 but a 53 percent jump from 2019.
But the average shrink rate as a percentage of sales dropped to 1.4 percent in 2021 from 1.6 percent in 2020, according to the latest NRF survey. That number has hovered around 1.4 percent for more than a decade.
Some macro-economic factors are likely at play here. Many brick-and-mortar chains are under pressure from Amazon and other competitors. They have also struggled with higher costs for labor, transportation and other expenses during the pandemic, as well as supply chain challenges.
They have more control over shrink than they do some of those forces, researchers say.
“In an environment where you’re looking for any improvement, shrink becomes an area to attack because of all the other costs rising,” said Ray Wimer, a professor of retail practice at Syracuse University.
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