Global Retail Theft Barometer: Theft and Fraud Cost Hong Kong Retailers HK$4.89 Billion -- The Highest in Three Years

HONG KONG, Nov. 5, 2015 /PRNewswire/ -- Hong Kong saw its overall crime rate fall to a 41-year-low last year but retail theft did not see a similar trend. Retail crime (shoplifting, dishonest employee theft and vendor/supplier fraud) cost HK$4.89 billion -- the highest in three years -- and accounted for 95% of the HK$5.15 billion retail shrinkage in Hong Kong in 2014, according to the 2014-15 Global Retail Theft Barometer commissioned by Checkpoint Systems. Shrinkage was defined as losses from shoplifting, employee theft, vendor/supplier fraud and administrative errors.

The report says shrinkage cost the global retail industry more than US$123 billion in 2014, representing 1.23% of worldwide retail sales on average. Overall shrinkage for Hong Kong was 1.05% of total retail sales. The rate has in fact decreased compared to 2013 (1.09%) and 2012 (1.10%).  However, the proportion of shoplifting is the highest in three years at 84% (HK$4.32 billion), compared to 55% (HK$2.3 billion) in 2013 and 59% (HK$2.5 billion) in 2012.  The proportion was also the highest among the four Asia Pacific markets surveyed, well above that in Japan (66%), mainland China (55%) and Australia (39%).   

Of the 24 markets covered in the study, each Hong Kong consumer has to shoulder HK$1,816 (US$232.8) in the cost of retail crime (2013: HK$1,363; 2012: HK$613), which is the highest among the four Asia Pacific markets. The cost of retail crime refers to losses incurred due to crime (dishonest employees, shoplifting and supplier fraud) and retailers' spending on loss prevention.

Denim fashion items, batteries, mobile device accessories, infant formula and cosmetics were among the most targeted by shoplifters and dishonest employees in the Asia Pacific, who sought to steal items that are easy to conceal and have a high resale value.

Commenting on the findings, Mr. Ken Ng, Manager Director for Greater China at Checkpoint Systems, said,  "Despite rising retail crime, employee theft is at its lowest level in three years at 6%. Retailers in Hong Kong are spending the most on loss prevention measures, investing 1.68% of total revenue, compared to the global average of 1.19% and the Asia average of 0.97%, and this is helping to curb shrinkage internally."

"Most are using a combination of smart loss prevention and RFID (radio frequency identification) solutions, alongside increased manpower, to help reduce out-of-stocks, improve merchandise availability for consumers and increase sales but the retail industry is looking at doing more to combat overall shrinkage, particularly losses that relate to high-tech crime," said Mr. Ng.

The most popular loss prevention solutions in the Asia Pacific were electronic article surveillance (EAS) labels, hard tags and antennas, buckles with alarms and locked display boxes.

The study, commissioned by Checkpoint Systems, Inc. (NYSE: CKP), was conducted by The Smart Cube and Ernie Deyle, a retail loss prevention analyst. It was based upon in-depth phone and written survey interviews conducted in 24 markets among 203 retailers representing US$996.2 billion in sales in 2014.

Interested parties can obtain a copy of the 2014-2015 Global Retail Theft Barometer report at GlobalRetailTheftBarometer.com.

About Checkpoint Systems, Inc. (www.checkpointsystems.com)

Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry, encompassing loss prevention and merchandise visibility. Checkpoint provides end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper experience. Checkpoint's solutions are built upon 45 years of radio frequency technology expertise, innovative high-theft and loss-prevention solutions, market-leading RFID hardware and software, and comprehensive labeling capabilities to brand, secure and track merchandise from source to shelf. Checkpoint's customers benefit from increased sales and profits by implementing merchandise availability solutions to ensure the right merchandise is available at the right place and time when consumers are ready to buy. Listed on the NYSE (NYSE: CKP), Checkpoint operates in every major geographic market and employs 4,700 people worldwide.

Twitter @CheckpointSys

About The Smart Cube (www.thesmartcube.com)

The Smart Cube is a global professional services firm that specializes in delivering custom research and analytics services. The firm helps organizations make critical decisions based on bespoke intelligence and insight. Founded in 2003, The Smart Cube has conducted more than 19,000 studies through its global network of 500 analysts. The firm is headquartered in London and has professionals throughout Asia Pacific, the United States, Europe, and Latin America. Follow The Smart Cube on LinkedIn at http://www.linkedin.com/company/the-smart-cube or on Twitter @TSCInsights.

CONTACT:
Vianne Fung
Golin
+852 2501 7908
VFung@golin.com

Appendix

Global Retail Theft Barometer Report

Global Retail Shrinkage Rates (%) by Country. 2014-2015

Source of information: "The Global Retail Theft Barometer 2014-2015" Author ©: The Smart Cube; Publisher ©: Checkpoint Systems, Inc. First Edition: November 2015