Global Retail Theft Barometer Study Finds Shrinkage Down 1.9% to 1.04% of Retail Sales, Totaled RMB7.2 Billion

2010-11-02 11:40 2131

China Continues to Rank as One of the "Ten Lowest Shrink Countries" Worldwide

BEIJING, Nov. 2, 2010 /PRNewswire-Asia/ -- According to the Global Retail Theft Barometer (GRTB) 2010, losses incurred from retail theft and administrative errors amounted to RMB7.2 billion (USD1.07 billion) in the past year, a huge crime cost that is equivalent to an annual tax imposed on all retailers and consumers. 

Retailers and consumers in China suffered heavy losses caused by retail theft and administrative errors, GRTB revealed that incurred amount hit RMB 7.2 billion in the past year.

Consumer electronics like MP3 or memory cards are "high-risk" stolen merchandises.

To alleviate huge losses incurred from shoplifting, China retailers are seeking better protection methods for "high-theft" merchandises.

The study, sponsored by an independent grant from Checkpoint Systems, is the largest survey of retail crime and loss in the world, and its main objective is to monitor the costs of shrinkage from shoplifting, crime-related losses and administrative errors in the global retail industry.  This report has been prepared from details by 1,103 of the largest retailers from 42 countries including USA, Canada, United Kingdom and China.  In China, 49 corporations with nearly 10,000 chain stores located in Beijing, Shanghai and Guangzhou responded to the survey.

GRTB found that retail shrinkage rates of all countries/regions dropped globally during the survey period from July 2009 to June 2010.  China continues to rank as one of the "Ten Lowest Shrink Countries" worldwide, with shrinkage rate at only 1.04% of retail sales, which is equivalent to RMB7.2 billion (USD1.07 billion).  However, this percentage only went down 1.9% from 2009; and there is still room for improvement when comparing to the average reduction of 6.5% in Asia-Pacific.  India is the country with the highest shrinkage rate, at 2.72% of retail sales.  The lowest rate of shrink was found in Taiwan (0.87%) and Hong Kong ranked the 2nd lowest (0.91%).  The Asia-Pacific rate was 1.16%.

Customer theft caused the greatest shrink loss in most countries, followed by employee theft.  Retailers in China suffered 49.4% of retail shrinkage by shoplifters, amounting to an annual sum of RMB3.54 billion (USD0.53 billion).  Employee theft also reached 19.5% of retail shrinkage and amounted to RMB1.40 billion (USD0.21 billion).  These two sources added up to a total sum of about RMB5 billion.  Other sources of retail shrinkage include suppliers/vendors' fraud and internal errors. 

Mr. Ken Ng, Managing Director, Greater China of Checkpoint Systems said that although retail shrinkage was reduced compared to last year, losses incurred from shoplifting and employee theft actually increased from RMB4.82 billion (USD0.72 billion) last year by about RMB0.2 billion to RMB5 billion (USD0.74 billion) in 2010.  To reduce shrinkage more effectively, Mr. Ng also suggested that retailers can investigate the main causes of retail theft before adopting new loss prevention policies, followed by the implementation of targeted, long-term strategies such as providing special protection to the most-stolen merchandise and reinforce employee training.

"During the study period, loss prevention spending from China retailers totaled RMB1.3 billion (USD 0.196 billion) and accounted for 0.19% of retail sales, a slight increase compared to 0.18% last year; China just met the Asia-Pacific average but still went far below the global average at 0.34%," Ken Ng said.

According to the results of GRTB 2010, the vertical market with the highest shrink rate was found in apparel/clothing and fashion/accessories (1.72%), followed by cosmetics/perfume/health & beauty/pharmacy (1.70%).  Other most-stolen merchandise include:

  • Lipsticks/glosses/lip liners (2.86%)
  • Shaving products (2.75%)
  • Perfume/fragrances (2.41%)
  • Infant formula (2.07%)
  • Fashion/tailored clothing (1.88%)

"The correlation between increased security spending and a global 5.6% decrease in theft is very significant," said Professor Joshua Bamfield, the author of the study and the Director of the Centre for Retail Research. "It highlights the importance of continued advancement and improvement of loss prevention programs, as reducing theft is key to the success and growth of retailers' businesses."

"Many retailers are now aware of the key to reduce shrink, and have rapidly allocated more resources to provide better protection for high-theft merchandise, such as Electronic Article Surveillance systems (EAS), electronic tagging of security labels, more employee training to deter theft, etc.  These measures brought remarkable success in shrinkage reduction, though many popular stolen merchandise still need to be protected in a more secure manner.  Our industry must accelerate the pace of innovation and introduce better shrink management solutions in order to help both retailers and consumers," Ken Ng added.

Checkpoint Systems is a global leader in shrink management, merchandise visibility and apparel labeling solutions.  Partnering with retailers and their suppliers, Checkpoint utilizes electronic article surveillance systems and integrates RFID technology to increase supply chain efficiencies, merchandise visibility and sales turnover.  In just five years' time, Checkpoint has already gained a strong foothold in China and have successfully deployed its solutions across various retail sectors, including hypermarkets such as Tesco, Carrefour, RT-Mart, METRO Cash & Carry, international apparel retail chain like Uniqlo, and Europe's largest consumer electronics retailer, Media Markt which will be opening its first flagship store in Shanghai.

Mr. Richard Leonard, Director of Loss Prevention & Security Tesco China said, "Tesco has chosen to partner with Checkpoint Systems in 2008 and installed in more than 80 stores throughout China with their shrink management solutions, including both EAS and Alpha high-theft solutions.  With the effort from Tesco's LP&S team, together with the training and solutions provided by Checkpoint, we are pleased to have brought shrinkage down significantly."

The Survey

Started in 2001 in Europe and expanded in 2007 globally, the Global Retail Theft Barometer (GRTB) is an annual survey conducted by the Centre for Retail Research in Nottingham, UK and sponsored by Checkpoint Systems. This study is the largest and most comprehensive survey of retail theft and crime in the world. The study covers key trends in retail shrink and crime in 42 countries and regions across the world, including the U.S., China, India, Europe, Japan and Australia. Russia is included for the first time this year. This report has been prepared from confidential details provided by 1,103 of the largest retailers representing 233,721 stores with combined sales of RMB5,854.5 billion (US$873.8 billion), representing a cross-section of countries and retail vertical markets.

About The Centre For Retail Research

The fourth edition of the Global Retail Theft Barometer (tenth edition for Europe) has been produced by Professor Joshua Bamfield, Director of the Centre for Retail Research ( with the cooperation of Checkpoint Systems, Inc. The CRR is an independent organization providing research and consultancy for the retail sector dealing with the changing face of retailing and focusing on retail fraud and crime. It has carried out extensive studies dealing with the costs of crime and the application of electronic and computerized systems to combat shop theft and fraud in many parts of the world.

About Checkpoint Systems, Inc.

Checkpoint Systems is a global leader in shrink management, merchandise visibility and apparel labeling solutions. Checkpoint enables retailers and their suppliers to reduce shrink, improve shelf availability and leverage real-time data to achieve operational excellence. Checkpoint solutions are built upon 40 years of RF technology expertise, diverse shrink management offerings, a broad portfolio of apparel labeling solutions, market-leading RFID applications, innovative high-theft solutions and its Web-based Check-Net data management platform. As a result, Checkpoint customers enjoy increased sales and profits by improving supply-chain efficiencies, by facilitating on-demand label printing and by providing a secure open-merchandising environment enhancing the consumer's shopping experience. Listed on the NYSE (NYSE:CKP), Checkpoint operates in every major geographic market and employs 5,700 people worldwide. For more information, visit


Natalie Chan
Checkpoint Systems, Inc.
Tel: +852-2995-8350

Source: Checkpoint Systems, Inc.
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