ACADEMIC VIEWPOINT by Richard C. Hollinger, Ph.D.
2012 NRSS Executive Summary
Dr. Hollinger is professor and chair of the Department of Sociology and Criminology & Law at the University of Florida, Gainesville. He is also director of the Security Research Project, which annually conducts the National Retail Security Survey. Dr. Hollinger can be reached at rhollin@ufl.edu or 352-294-7175. © 2014 Richard C. Hollinger
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f you are a regular reader of our report, you already know that there are always more similarities in the National Retail Security Survey (NRSS) findings from year to year than differences. This is to be expected in a stable, mature industry that does not fluctuate dramatically in its loss prevention practices and asset protection procedures. However, there are some notable differences this year from the previous year’s results. Despite the fact that we are still mired in sluggish economic times, this year we can report that 93 retail corporations sent in questionnaires. Not all surveys were fully completed, which caused some missing data problems. This response level is down from the number of firms that participated last year, which is a disturbing trend. Despite the turbulent retail environment, many loss prevention executives, directors, and managers believe in the importance of this research effort and support it annually. For this we are quite appreciative. While the data are reported anonymously, we can assure the reader that corporations that have responded to our survey represent the vast majority of the top 100 major retailers in the country.
Overall Shrink Rate
This year the overall inventory shrinkage rate of 1.47 percent was somewhat higher than reported in last year’s survey. Despite this slight increase over last year, the reader should note that over the past few years, inventory shrinkage continues to remain at the very lowest levels observed in the nearly two-decade history of this survey. We believe that this is remarkably good news and demonstrates clear and consistent progress in the war on reducing retail losses in spite of the present economic slump and the threat of organized retail crime (ORC). The news is not all good, however. Although the shrinkage percentages are at significantly lower levels than observed during the very early years of the survey, the dollar value that this loss represents continues to remain at record levels due largely to an increase in U.S. gross retail sales. In other words, this huge $44 billion dollar loss is more likely the result of moderate growth in the retail economy, not the result of significant increases in inventory shrinkage percentages.
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MARCH - APRIL 2014
High-Shrink Segments. Five retail segments reported significantly higher than average shrinkage levels: ■ Crafts and hobbies ■ Supermarket and grocery ■ Children’s apparel ■ Men’s and women’s apparel ■ Women’s apparel This result is largely due to the especially high desirability of items sold in these particular chains, making theft much more attractive to ORC gangs, amateur shoplifters, and employees. Low-Shrink Segments. Alternatively, the lowest shrinkage stores generally have the most sophisticated security systems and more often require customers to pay for merchandise before they are allowed to physically acquire purchases: ■ Discount stores ■ Department stores ■ Sporting good and recreational products ■ Drug store and pharmacy ■ Specialty accessories ■ Liquor, wine, beer, or tobacco products ■ Shoes ■ Jewelry and watches ■ Books, magazines, and music ■ Electronics, computers, and appliances Shrink by Location. Stores that are typically located in enclosed malls had a below-average shrink rate of 1.09 percent. Those located primarily in standalone stores reported an above average shrink rate of 1.56 percent as did those located in strip centers or strip malls, who reported 1.73 percent.
Sources of Loss
Stability was seen once again in the respondent’s assessment where they attributed the source of their retail inventory losses. In fact, both employee theft (41%) and shoplifting (33%) reported similar proportions to those in last year’s survey. Employee theft was the highest in the following segments: ■ Liquor, wine, beer, or tobacco products ■ Discount stores ■ Department stores ■ Women’s apparel ■ Drug store and pharmacy ■ Children’s apparel ■ Men and women’s apparel continued on page 26 |
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