Holiday Shrinkage Seen Rising 4%

Checkpoint expects $8.9 billion in losses from all sources.

Increases in retail shrinkage this holiday season might exceed those for retail sales.

This story first appeared in the December 4, 2012 issue of WWD.  Subscribe Today.

A study conducted by the Centre for Retail Research for Checkpoint Systems suggests that retail losses from all sources — dishonest employees, customer theft and faulty supplier and distribution losses — are expected to amount to $8.9 billion during the period from mid-November through Christmas, a 4 percent increase over their level from 2011.

The breakdown of the losses, which theoretically add $98 to every U.S. family’s shopping bill, is $4.7 billion sacrificed to employee theft, $3.8 billion to shoplifting and $400 million attributable to vendor and distribution losses.

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Women’s apparel and accessories rank among the products most coveted by internal and external thieves, ranking only behind alcohol among the product categories most likely to be lifted. Toys are third, while perfume and health and beauty gift packs ranks fourth, men’s toiletries tied for fifth and watches and jewelry were the ninth most popular classification.

“The Christmas season is an especially attractive time for criminals,” said Joshua Bamfield, director of the Centre for Retail Research and author of the report. “Thieves take advantage of busy stores to steal high-value, high-demand goods. As a result, retailers face a big threat from professional and semiprofessional thieves, many of whom steal goods with the intention of reselling them. Organized retail crime is a major concern for retailers, especially since the average amount stolen per incident is much higher than ‘normal’ thefts.”

Checkpoint Systems markets products and programs to minimize retail shrinkage.

Earlier this year, the National Retail Federation reported that retail shrinkage as a percentage of retail sales declined to 1.4 percent, or $34.5 billion, last year from 1.49 percent, or $37.1 billion, in 2010.