A new survey reveals many small- and mid-sized retailers face more of a challenge from shrink than their larger peers.
According to the Software Advice 2023 Retail Shrink Survey of 416 small- and medium-sized retailers, 68% of respondents have shrink rates that are currently above the industry standard rate of 1.5%. Shrink as a percentage of sales has increased for more than one-third of respondents.
In addition, close to half (46%) of respondents say external theft has increased in their stores, with the average respondent citing rising external theft operating a portfolio of 20 or more stores.
Given these results, it is unsurprising that almost nine in 10 (88%) respondents say preventing retail shrink is a top priority. According to Software Advice analysis, the following factors make up almost all retail shrink incidents affecting respondents:
- External theft 41% (shoplifting, robbery, fraudulent returns).
- Damaged inventory 19% (improper accounting of damaged items)
- Vendor fraud 14% (Overbilling, missing items in deliveries, price gouging).
- Employee theft 14%.
- Internal errors 11% (Inventory errors and cashier miscounts).
In addition to rising rates of overall shrink, vendor fraud (24%) is also increasing for some respondents. Other shrink factors that are growing for some respondents include employee theft (17%) and internal errors (16%).
Common in-store loss prevention strategies
Loss prevention strategies used by more than one-third of respondents in their stores include:
- Using security cameras (53%).
- Arranging store layout to prevent theft (40%).
- Using inventory management software (39%).
- Installing security sensors (35%).
- Keeping records of known shoplifters (34%).
Employee training
More than four in 10 respondents have trained employees in the following shrink-fighting measures:
- Greeting all customers entering the store (62%).
- Reporting shoplifting incidents to company (56%).
- Counting the register daily and reporting discrepancies (52%).
- Calling security for active shoplifting incidents (47%).
- Filing police reports for external theft incidents (43%).
Other findings
- The average value of items stolen from respondents is $25.
- Forty-five percent of respondents experience external theft at least once a week.
Source: chainstoreage.com
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