WASHINGTON — The number of retailers victimized by organized retail crime groups increased in the past year, as criminal gangs became increasingly more brazen and violent in their quest to steal a wide range of popular consumer products, the National Retail Federation said in its annual report.
This story first appeared in the June 5, 2012 issue of WWD. Subscribe Today.
The NRF’s eighth annual study revealed that of the 125 retailers surveyed, 96 percent said they had been the victim of organized retail crime in the past year, up from 94.5 percent last year. Another 87 percent said organized retail crime has increased in the past three years.
Denim jeans continued to be one of the top stolen items, according to the retailers surveyed in the report. In general, criminal groups target department and specialty stores for items such as designer clothing, handbags, lingerie and accessories and resell it online, at pawn shops and flea markets, and through other fencing operations. Gift cards, over-the-counter medicines, electronics, batteries and infant formula were also in high demand.
“What this tells us is that as retailers and law enforcement become more aware of and more proactive in pursuing organized retail crime gangs, criminals have become more desperate and brazen in their efforts, stopping at nothing to get their hands on large quantities of merchandise,” said Rich Mellor, vice president of loss prevention at the NRF. “Selling this stolen merchandise is a growing criminal enterprise and retailers must remain vigilant as this is an issue that involves everyone’s cooperation when it comes to protecting retailer’s assets, including their valued store associates and customers.”
The NRF’s survey was conducted from April 17 to May 11 and involved loss-prevention executives from department stores, large-box retailers, discounters, drug stores, groceries, restaurants and specialty retailers. The report cited several factors contributing to the increased level of crime, including a weakened economy, lower staffing levels at stores and the “ease” of selling stolen merchandise in a variety of outlets.
Among the new trends in criminal activity that retailers reported were digital receipt fraud, increased laundry detergent thefts, increased smash-and-grab incidents and collusion with street gangs. Cargo theft “continues to grow at an alarming rate, posing huge problems for retailers and their distribution centers,” the report said. According to the survey, 52.1 percent of companies said they were a victim of cargo theft in the past 12 months, up from 49.6 percent last year.
“A significantly higher percent of companies [68.1 percent this versus 57.4 percent last year] said cargo theft occurs mostly en route from the distribution center to the store,” the report said. Four in 10 retailers said theft also occurs en route from the manufacturer to the distribution center, while 15.9 percent said the crime happens at the distribution center.
The top 10 cities and regions in the U.S. where the organized criminal activity occurred were Atlanta, Baltimore/Washington D.C., Chicago, Dallas, Houston, Los Angeles/Orange County, New York/Northern New Jersey, Miami, Phoenix and San Francisco/Oakland, according to the report.
“Though retailers continue to make great strides in their fight against organized retail crime, sophisticated criminals with unending opportunities and anonymous outlets to sell their stolen merchandise are proving to be quite challenging for both retailers and law enforcement agencies working to combat this issue,” said Joe LaRocca senior asset protection adviser at the NRF. “With the types of organized retail crimes changing in severity and scope every day, and cargo theft and violent instances becoming more troubling, retailers are constantly on high alert.”