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- The total shrinkage amount in Japan reached JPY774 billion
- Shrinkage rate increased by 4.0% from the previous year to 1.04%
TOKYO, Dec. 7, 2011 /PRNewswire-Asia/ -- According to the 5th annual edition of the Global Retail Theft Barometer, retail shrinkage rate in Japan is 1.04% of sales, the 3rd-lowest in the world. However, this rate was up 4.0% compared to the previous year. The total shrinkage amount -- profit loss due to customer and employee theft, supplier/vendor fraud and administrative errors -- in Japan reached JPY774 billion, the 2nd-highest worldwide, representing almost 53% of the total sum in the Asia-Pacific.
The study, conducted by the Centre for Retail Research and sponsored by an independent grant from Checkpoint Systems, monitored the costs of shrinkage in the global retail industry between July 2010 and June 2011, and found that total global shrink cost the retailers JPY9,602.7 billion in 2011 or 1.45% of sales. This global shrink rate is 6.6% (4.0% in Japan) higher than the previous year, and represents the highest percentage recorded by the survey since it began in 2007. Customer theft, including shoplifting and organized retail crime (ORC), was the main cause of shrinkage in most countries, costing retailers JPY4,152.3 billion in 2011 (43.2% of total shrinkage) compared to 42.4% in 2010. ORC became a growing problem internationally and the percentage of retailers globally suffering increased ORC losses was an average of 47.5%. Dishonest employees were responsible for JPY3,362.1 billion or 35% of shrink. In Asia-Pacific, a majority of retailers perceive dishonest customers as the single most important source of loss, responsible for JPY782.1 billion of losses or 53.3%. However, the average amount admitted stolen by employees was more than four times the average stolen by shoplifters.
Shrinkage in Asia-Pacific
The highest average rates (as percentage of sales) of shrinkage were found among:
Small but expensive "mobile" items tend to have the highest risk for theft. The most-stolen items were from the cosmetics category, including:
High quality seafood/fish (2.21%), alcohol/liquor (1.84%) and fresh meat (1.83%) made up the top three most-stolen grocery 'high-risk' product lines.
Shrinkage in Japan
Sources of retail shrinkage
Customer theft (58.1%) was the main cause of shrinkage in Japan, costing retailers JPY451.5 billion. It is higher than the Asia-Pacific average of 53.3%.
Loss prevention and security cost
Loss prevention spending by Japanese retailers was JPY112.9 billion and equivalent to 0.15% of retail sales, lower than the global average of 0.35% and Asia-Pacific average of 0.19%.
The costs of retail crime
The cost of retail crime including shoplifting, employee theft, supplier/vendor fraud and loss prevention cost for Japan was JPY766 billion. The loss prevention costs are included as one of the costs of crime; without the existence of retail crime much loss prevention expenditure would be unnecessary. These costs of crime are equivalent to an annual tax imposed by criminals on honest shoppers in every household. In 2011, this 'crime tax' was equivalent to JPY14,996 per household in Japan (The Global average was JPY16,117).
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, underwritten through an independent grant from Checkpoint Systems. This study is the largest and most comprehensive survey of retail theft and crime in the world. It covers key trends in retail shrink and crime in 43 countries and regions across the world, including the U.S., China, India, Europe, Russia, Japan and Australia. South Korea is included for the first time this year. This report has been prepared from confidential details provided by 1,187 of the largest retailers (representing more than 250,000 retail outlets) with combined sales of US$986.6 billion/JPY79,498.2billion, representing a cross-section of countries and retail vertical markets.
About The Centre for Retail Research (CRR)
The fifth edition of the Global Retail Theft Barometer (11th edition for Europe) was produced by Professor Joshua Bamfield, Director of the Centre for Retail Research (www.retailresearch.org) with the support 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 www.checkpointsystems.com.
For more information on the report and to download photos or browse videos, visit: www.globalretailtheftbarometer.com.
