Shoplifting, employee or supplier fraud and administrative errors are collectively costing the average Australian household over A$424 per year.
This is according to alarming statistics published in the 2014-2015 Global Retail Theft Barometer.
While retail shrinkage dropped in Australia from the same period last year, the problem continues to cost retailers A$2.7 billion per annum.
It fell from 1.00 percent of sales in 2013-2014 to 0.96 percent during 2014-2015.
This is based on responses from common retail respondents who participated in Global Retail Theft Barometer surveys both years.
Checkpoint Systems executive Mark Gentle said the figures revealed compelling local insights.
"In fact, amongst the four APAC countries that were surveyed, Australia registered the lowest shrinkage rate (1.02%) during 2014–2015.
"Globally, this compares to 1.42 percent, a figure also up from the previous 0.94 percent average of all common retailers surveyed the previous year."
Shoplifting and Employee Theft Are Leading Causes
"Shoplifting was the biggest cause of retail shrink in 18 of the 24 countries surveyed," Gentle said.
"This was reflected in Australia, where shoplifting ranked first at 39 percent and employee theft ranked next at 25 percent.
"The primary reasons for employee theft were weak pre-employment screening procedures, reduced associate supervision, increasing part-time workforce (especially during peak sales periods when theft is highest), and the easy sale of stolen merchandise."
Infant Formula A Hot Commodity
Shoplifters and dishonest employees in Australia primarily targeted small and easy-to-conceal items such as mobile accessories, batteries, fashion accessories and razor blades.
This is in addition to high-value items with high resale value, such as denim, handbags, iPhones/smartphones, perfumes and fragrances, and surprisingly, infant formula.
When sorted by retail vertical, the most stolen items included denim (Apparel and Fashion Accessories); batteries (DIY Home Improvement); mobile device accessories (Electronics); infant formula (Food and Beverage); and makeup products (Health and Beauty).
Supermarkets Take The Top Spot In Retail Shrinkage
APAC supermarkets/grocery retailers (1.68 percent), sports goods stores (1.32 percent) and hypermarkets/mass merchandisers (1.06 percent) witnessed the highest shrink rates because of the widespread prevalence of internal and external retail theft targeting their merchandise.
Christmas Encourages Five Finger Discounts
Unlike other regions (where winters witnessed the highest shrink), Asia Pacific witnessed the highest shrinkage during summers, followed by spring, autumn, and winters.
Shrinkage risk during all four seasons was the maximum during sales period when customer traffic/footfall in stores is high, making it difficult to implement loss prevention solutions.
The Global Retail Theft Barometre is underwritten by an independent grant from Checkpoint Systems.