The Global Retail Theft Barometer for 2011 has revealed that shrinkage in Australia has increased significantly, costing retailers more than $1.94 billion in product losses.
The fifth annual study, conducted by the Centre for Retail Research, Nottingham, monitored the costs of shrinkage (loss from shoplifting/employee crimes and administrative errors) in the global retail industry between July 2010 and June 2011.
The research found that despite an overall decrease in retail theft last year, shrinkage has again grown at a remarkable rate to 6.6 per cent or $112 billion globally. In Australia shrinkage had its most significant increase in three years, rising 2.9 per cent over 2010/11, which translates to approximately $1.94 billion to date.
Clothing and accessories in Australia were identified as the category with the second most stolen items, at 3.6 per cent, after shaving products, and followed by outerwear (2.9 per cent) and perfume & fragrances (2.8 per cent).
According to the report, internal employee theft also remains the biggest cause of shrinkage at 40 per cent and continues to outweigh that of shoplifters at 37.3 per cent.
Checkpoint Systems Australia and New Zealand managing director Mark Gentle said the rapid rise of technology and increased use in the community was a large contributor to this increase.
“Against the regional trend, Australian retailers continue to lose more money on employee theft than from shoplifters,” he said.
“Greater accessibility to internet combined with the huge increase in popularity of online retail has made internal theft even more appealing for Aussie employees. Employees are not only stealing for their own use but also to make money.”
Glenn McFarlane, leading senior constable, crime prevention office, Victoria Police said online retail was also a factor which exacerbated internal theft.
“Online retail has definitely increased the opportunity for internal theft. There have been a number of cases where employees have been caught selling stolen items online before the product has actually launched in Australia. Retailers need to become more stringent with their employee application and training processes,” he said.
For more on shrinkage and its impact on fashion retail, pick up a copy of Ragtrader November 5 edition.