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INDIA TOPS THE CHART IN RETAIL SHRINKAGE RATE AMONG 42 COUNTRIES SURVEYED
October 19th 2010: In a study funded by Checkpoint Systems, Inc. & conducted by the
Centre for Retail Research, Nottingham; India has once again topped the Charts in
Retail Shrinkage Rate. The Global Retail Theft Barometer 2010 (GRTB 2010) survey has
reported key trends in retail shrinkage and crime in 42 countries and regions across the
world, including the U.S., China, India, Europe, Japan and Australia, Russia & is funded by
Checkpoints System Inc. |
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This report has been derived through a confidential survey of 1,103 of the largest retailers
with combined sales of $873.8 billion, representing a cross-section of countries and retail
vertical markets.
As per the report, the countries with the highest rates of shrinkage as a percentage of
sales are India (shrinkage 2.72% of retail sales) followed by Morocco (1.64%) and Brazil
(1.64%). The lowest rates of shrinkage were found in Taiwan (0.87%), Hong Kong SAR
(0.91%), and Austria (0.97%). The lowest average shrink rates were in Asia-Pacific
(average shrinkage 1.16%) and the highest in Middle East/Africa (1.62%).
According to, Mr. Dharmesh Lamba, Country Manager - Checkpoint Systems, Inc.
– the sponsor of the Study, “Although India tops the chart in shrinkage this year too;
the percentage has been reduced from 3.2% last year to 2.72% this year due to a
considerable spend in loss prevention measures. The Security spending in India has
increased from 0.19% to 0.23%, which reflects the reduction of shrinkage in India this
year. Although this percentage is lower than the Global average, yet it’s increased
considerably as compared to last year”.
Shrinkage trend in India
| INDIA |
--2006-- |
--2007-- |
--2008-- |
--2009-- |
--2010-- |
| Retail Responses |
NIL |
21 |
28 |
33 |
30 |
| Total no of stores |
NIL |
1440 |
1120 |
1285 |
5932 |
| Total Sales (USD M) |
NIL |
5732 |
4986 |
7383 |
6790 |
| Shrink % |
3.2 |
2.9 |
3.1 |
3.2 |
2.72 |
| Shrink $ USD |
NIL |
2379 |
2543 |
2625 |
2232 |
| LP Spending (% of sales ) |
NIL |
0.18 |
0.2 |
0.19 |
0.23 |
Shoplifters Source of
retail shrikage % |
NIL |
50.2 |
44.7 |
45.2 |
47.3 |
| Total Amount (USD M) |
NIL |
1194 |
1137 |
1186 |
1056 |
Employee Thieves Source of
retail Shrinkage % |
NIL |
19.3 |
23.7 |
23.3 |
26.4 |
| Total Amount USD |
NIL |
459 |
604 |
612 |
590 |
Loss prevention spending by Asia Pacific retailers was a total of $2,686 million in 2010,
an increase of $169 million compared with 2009. This level of spending was equivalent to
0.19% of retail sales, lower than the global average of 0.34%, but greater than the 2009
percentage of 0.17%
The noted Theft Pattern shows; in India shoplifting still dominates with 52.9 % of the retail
shrinkage. Employee theft continues to be the second largest (23.3%) source, Internal
error contributed (17.3%) and Supplier/vendor fraud was seen (6.5%) of total shrinkage.
The High Shrink Vertical Markets in the Asia Pacific Region were apparel/clothing and
fashion/accessories; cosmetics/ perfume/health & beauty/pharmacy (1.71%); and vehicle/
auto parts/hardware/DIY/building materials retail (1.64%).The lowest rates were in
footwear/shoes/sports goods & sporting goods (0.63%), jewelery/ watches (0.81%) and
discount/variety retail/warehouse clubs (0.85%).
As a company dedicated to facilitating interaction between different participants in an inter-
continental supply chain, Checkpoint Systems Inc. has been at the forefront of developing
solutions that deliver benefits globally. Sponsoring a global survey like this year after year
is an indication of Checkpoint’s commitment to furthering the flow of information between
the cardinal points of retail worldwide.
Report highlights
* This year, 30 retailers with altogether over 5,900 stores responded to the survey.
* Even though India's shrink ranking still tops the region and the study, shrink has actually improved significantly over last year. (from 3.2% to 2.72%) .
* Loss Prevention spending had increased / resumed after recovery from recession in
2009. It is believed that a correlation exists between the shrink % and Loss Prevention
spending.
* While shoplifters remain as the most dominant course of retail shrinkage, the %
of employee theives is rapidly on the rise. Retailers may have to start looking into
solutions which protect them from also employee thieves.
* A section had been added with details on the top shrink merchandise for 3 vertical
markets: grocers, apparel retailers & drug/pharmacy (p.25-27). Maybe a good twist to
tie that with our high theft solutions: Baby formula (top hot product in grocery) with the
milk can cap; shavers (for health & beauty) with keepers, and fashion/tailored clothing
(for apparel) with 3 alarm.
About Checkpoint Systems Inc.:
Checkpoint Systems Inc., established in 1969, is traded on the New York Stock Exchange with an annual company
turnover of $780 million. It commands 45% market share worldwide in the Electronic Article Surveillance (EAS)
systems and 80% in the radio frequency based EAS systems (anti-shoplifting systems). It provides shrink management
solutions to over half of the world’s top 200 largest global retailers. It has a presence in 80 countries and a global
network of more than 25 service bureaus in the world’s apparel manufacturing space; 32 direct subsidiaries
throughout Asia Pacific, Europe & the American continent. Pantaloons, Aditya Birla Group, Koutons Retail, Ritu
Kumar, Lilliput are few of the many brands Checkpoint is associated with in India. |
