Every year the Global Retail Theft Barometer is released, which is the largest and most authoritian report in the world on shop theft. According to the report, the cost was $123.39 billion US for retailers globally, which means the cost increased from 0.94 percent during 2013-2014 to 1.42 percent during 2014-2015. This means it is the biggest crime in the world today.
Australia went down from 1.00% to 0.96%, so you probably did not see the drop. This is in line with what we have always said here if you do not know your shop lifting figure assume about 1% as a starting point.
Although it has to be said with some retailers like a pharmacy the figure is much higher. Their rate of theft is 2.22%, which is up from 2013-2014 by 0.59%. No surprises there if you follow the news - drugs!
Added on top of that is that it is costing the retailer is about 0.79% in loss prevention spend. So assuming a 30% margin 1% x 70% + 0.79% = the cost of shop theft is 1.49% of total sales.
The worst period of the year for shoplifting in Australia was during the summer probably due to the big traffic during Christmas/End-of-year holidays.
The percentage breakdown in Australia by type.
- Dishonest employees will be about 25%
- External - shoplifting (39%)
- Administrative (accounting mistakes, pricing errors and process failures) about 23%
- Supplier fraud (no delivering what they said) 13%
The last two, in particular, show the importance of a good computer system.
One point I will say about supplier fraud, it may be the smallest but often if it happens its huge, for example, right now, we are working on an investigation where it is calculated that the figure lost in one newsagent is over $191,000+
One of the best tools to determine shop theft is stock takes. 39% of the respondents did one at least every month; 21% did it quarterly and most of the rest yearly. Despite what some people advice, we strongly advise that a retailer should do a stocktake at least once a year.
If you want your own copy of the report which is extremely detailed, please contact them here.
