HONG KONG, 6 November 2014 – Shrink, comprised of shoplifting and organized retail crime, employee or supplier fraud and administrative errors, cost the global retail industry more than US$128 billion last year, according to the latest Global Retail Theft Barometer. This represents 1.29% of retail sales, on average.

The study, commissioned by Checkpoint Systems, Inc. (NYSE: CKP), and conducted by The Smart Cube and Ernie Deyle, a retail loss prevention analyst, covered 24 markets in four regions – Asia Pacific, Europe, North America and Latin America – among 222 retailers representing US$744 billion in sales in 2013.

According to the study, shrink is down slightly compared to 2012 in all regions except for Asia Pacific where the shrink rate increased from 1.26% in 2012 to 1.28% in 2013, representing a total of US$37.6 billion. This is primarily due to the higher shrinkage rate recorded in China where organized retail crimes increased significantly. Out of the four markets surveyed in the region, China recorded the highest shrinkage (1.53%), followed by Hong Kong (1.09%), Australia (1.06%) and Japan (0.97%).

Globally, the lowest shrink rates were recorded in Norway (0.83% of retail sales), followed by Japan (0.97%). The highest rates were recorded in Mexico (1.6%) and in China (1.53%).

Shoplifting is the largest source of retail shrinkage in the Asia Pacific, except for in Australia, where internal theft by dishonest employees accounted for most of the losses. Hong Kong recorded the highest for shoplifting – 55.3% of total shrinkage – compared to China (50.4%), Japan (47.6%) and Australia (30%).

Cost of Retail Crime

According to the report, the global cost of retail crime (employee theft, shoplifting, loss prevention spend) amounted to US$180.38 billion, accounting for 1.81% of global retail sales. This translates into US$63.56 per person, usually in the form of increased prices. 
  
“A higher number of organized crimes and a higher cost of retail crime have fuelled spending on loss prevention as a percentage of revenue. Out of the 24 markets survey globally, retailers in Hong Kong reported the highest spending on retail loss prevention on average (1.51% of revenue). This may help explain the improvement in retail shrinkage in the city in 2013,” said Mr. Ken Ng, Manager Director for Greater China at Checkpoint Systems.

Most Stolen Merchandise

The most stolen merchandise reported by retailers globally and across the Asia Pacific were relatively smaller items – including fashion accessories and mobile accessories – but wines and spirits were also among the most targeted by shoplifters.

Discounters, apparel specialist retailers, stationers/office supply stores and department stores in the Asia Pacific were the most affected by shrinkage. Electronics retailers suffered the least shrinkage, mainly due to enhanced loss-prevention systems and adequate inventory management.

The most popular loss prevention solutions in the Asia Pacific were electronic article surveillance (EAS) labels, hard tags and antennas, display in locked cabinets or shelves and dummy cartons.

“Retailers in the Asia Pacific are increasingly using RFID (radio frequency identification)-based solutions, which offer both protection and visibility at item level,” said Mr. Ng. “This type of technology, combined with more investment in people and technology, can help reduce out-of-stocks, improve merchandise availability for consumers and increase sales for retailers.”

Interested parties can obtain a copy of the 2013-2014 Global Retail Theft Barometer report at www.GlobalRetailTheftBarometer.com.

-Ends- 

About Checkpoint Systems, Inc. (www.checkpointsystems.com)

Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry, encompassing loss prevention and merchandise visibility. Checkpoint provides end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper experience. Checkpoint's solutions are built upon 45 years of radio frequency technology expertise, innovative high-theft and loss-prevention solutions, market-leading RFID hardware and software, and comprehensive labeling capabilities to brand, secure and track merchandise from source to shelf. Checkpoint's customers benefit from increased sales and profits by implementing merchandise availability solutions to ensure the right merchandise is available at the right place and time when consumers are ready to buy. Listed on the NYSE (NYSE: CKP), Checkpoint operates in every major geographic market and employs 4,700 people worldwide.

Twitter @CheckpointSys

About The Smart Cube ( www.thesmartcube.com )

The Smart Cube is a global professional services firm that specializes in delivering custom research and analytics services. The firm helps organizations make critical decisions based on bespoke intelligence and insight. Founded in 2003, The Smart Cube has conducted more than 19,000 studies through its global network of 500 analysts. The firm is headquartered in London and has professionals throughout Asia Pacific, the United States, Europe, and Latin America. Follow The Smart Cube on LinkedIn at http://www.linkedin.com/company/the-smart-cube or on Twitter @TSCInsights. 

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http://www.checkpointsystems.com/AIPA/news-events/press-releases/2014/GRTB-2014-AP.aspx

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