Because of the pervasive stealing, retailers have increased security and implemented other harsh anti-theft measures in an attempt to deter thieves. The theft-related losses grew from $93.9 billion in 2021 to $112.1 billion in 2022, according to the 2023 National Retail Security Survey.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” NRF Vice President for Asset Protection and Retail Operations David Johnston said.
“Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.”
According to the study, the decrease rate in the fiscal year 2022 will be 1.6 percent, up from 1.4 percent in 2021. Theft accounted for nearly two-thirds of shop shrinkage. Shrink rate is a measure of inventory loss that takes into account things like employee error and stealing. It is the distinction between optimum and actual sales.
Retailers told NRF that organized retail crime remained their top concern, with 67 percent reporting an increase in organized crime over the previous year. The top five locations hit hardest by organized retail theft were identified to be Los Angeles, San Francisco, Houston, New York, and Seattle. Despite increasing loss prevention financing, 28 percent of businesses reported needing to close outlets in specific locations.
Retailers implement measures to combat theft and address rising losses
In order to combat theft, 45 percent of businesses lowered or altered their in-store product assortment, while 30 percent reduced or altered their operating hours. “Retailers are piloting and implementing a number of loss prevention practices to deter, prevent, and mitigate these substantial losses,” Loss Prevention Research Council Director Read Hayes said. “In addition to enhancing traditional security measures, many are also allocating resources to innovative emerging technologies for future prevention.”
Many retail businesses have been open about their losses, blaming theft as the primary cause. “Our team continues to face an unacceptable amount of retail theft and organized retail crime,” Target CEO Brian Cornell said on a conference call. “Shrink remains consistent with our expectations but well above the sustainable level where we expect to operate over time, and unfortunately, safety incidents associated with theft are moving in the wrong direction.”
Dick’s Sporting Goods executives expressed a similar view on their earnings. “The impact of theft on our shrink was meaningful to both our Q2 results and our go-forward expectations for the balance of the year,” said CEO Lauren Hobart during an earnings call.
Stock plummets as Dick’s sporting goods reveals unexpected losses due to rising theft incidents
Dick’s stock dropped by 25% as a result of their admission. “We thought we had adequately reserved for it. However, the number of incidents and the organized retail crime impact came in significantly higher than we anticipated,” Dick’s CFO Navdeep Gupta said.
According to the NRF report, thieves are targeting a wide range of merchandise. The most regularly stolen things range from high-end, high-fashion items to basic necessities that can be readily resold. According to the federation, the list has been extended to include jackets, batteries, energy drinks, designer footwear, and kitchen items. The 2023 National Retail Security Survey included senior loss prevention and security executives from 177 retail companies.