Retail Shrinkage: Indians are Unbeatable Yet Again !!

On an average, a modern retail format has 15 close circuit televisions and 30 employees on surveillance, yet when it comes to shoplifting, no one can beat Indians

First of all let’s understand what is retail shrinkage?

Retail shrinkage is the difference in the value of stock as per the books and the actual stock available in the shop. This short fall may be due to-

• Shoplifting
• Employee theft
• Supplier fraud
• Administrative errors

As per the survey conducted by Centre for Retail Research is a UK-based manufacturer and supplier of retail shrink management solutions, among 920 large retailers across 36 countries India with the highest shrinkage rate of 3.10 per cent, an increase of 6.9 per cent over last year.

In India, while Shoplifting were caused by customer theft which contributed around 44.7 percent loss, employee theft was responsible for 23.7 percent as compared to 8.4 per cent by suppliers, said the survey. However, administrative errors contributed to 23.2 per cent, added the survey.

In comparison to India global retail theft declined (5.5 per cent) between July 2009 and June 2010. Shrink cost retailers $107.3 billion during the study period, representing 1.36 per cent of global retail sales. This is down from 1.43 per cent the previous year. The lowest shrinkage rate was found in Taiwan (0.87 per cent), while in Europe the rate stood at 1.27 per cent.

What is more alarming that Indian retailers are not taking shrinkage seriously. They do not find it hitting their bottom line directly. Indian retailers are not ready to increase spent on security. Whereas report have shown clearly that those who have increased spent on security are able to shrinkage rate drastically.

 Nikhil Kunwar