NRF Sets the Record Straight
The misperception of shrink and its impact on organized retail crime

It’s time to set the record straight — claims that ORC losses are inflated due to inventory shrink are inaccurate

By David Johnston - Vice President, Asset Protection & Retail Operations, NRF

As communities and retailers grapple with escalating theft and violence, some continue to falsely suggest that organized retail crime losses are overstated due to a retailer’s reported inventory shrink.

Shrink, or shrinkage, measures inventory loss by comparing a retailer’s book inventory to the physical inventory on hand. Calculated as a percentage to sales, shrink is a metric used by a retailer to understand their current state of inventory loss. However, those who understand shrink know it is not a direct or sole indicator of theft.

Retail shrink is too broad to be directly correlated with theft

Shrink calculation encompasses diverse types of losses, not just theft. While it does include external theft (like shoplifting), employee theft and vendor fraud, shrink also accounts for non-theft-related losses such as administrative errors, damages, expired goods or spoilage.

Usually calculated at the store level, shrink helps retailers identify high-loss locations to further investigate how losses occurred. Also calculated at a corporate level, that number helps gauge loss as part of their profit and loss statements. A shrink percentage, either at an individual store or at the corporate level, does not identify the amount of specific category of loss, including theft.

Shrink calculation methods vary significantly between retailers

Various retailers employ different approaches to determine shrinkage, depending on their accounting practices, merchandise mix, and how losses are reported in their profit and loss statements. Some calculate at cost, others at retail. Some include non-theft items like damages or promotional adjustments, while others do not. Inventory counts can occur annually, quarterly or more frequently, leading to different posting times for shrink.

These differences in calculation highlight the unique and complex inventory environments of modern retail. NRF recognized that reporting an average annual inventory shrink percentage was no longer an accurate benchmark for retailers and ceased publishing an industry figure in 2023.

Not all theft is reflected in a shrink percentage

Losses from supply chain theft (cargo theft) and payment fraud (gift card, credit card fraud) typically appear in different sections of a retailer’s P&L statement.

Supply chain theft may be recorded in the cost of goods sold, occurring before items are officially accepted into inventory. Thefts involving credit and gift cards often result in chargebacks or financial losses, which are reported in a different section of a P&L. This means that relying solely on shrink percentage can result in underreporting the true impact of theft and organized retail crime.

Read the full article here: nrf.com


Can 'Love-Bombs' Curb Store Theft?
Retail staff told to ‘meet and greet’ customers to cut shoplifting

Police guidance says the technique makes potential thieves feel watched and dissuades them from stealing, as in-store security costs hit a record high

Shops should deploy staff to “meet and greet” customers coming through the door to cut spiralling shoplifting rates, according to police. Advice from forces across the country states that greeters can immediately deter potential criminals on entry as they feel they are being watched.

It can mean that shop owners meet a “three-to-five second rule” — a timeframe for speaking to potential criminals on entry to a store that is thought to dissuade them from stealing.

The guidance states: “Shoplifters can always assess how easy it is to steal from a shop by how soon after they enter that they are spoken to by a member of staff.

“Greeting customers as they enter your premises can put off shoplifters because it sends out a message that you and your staff are paying attention. If a thief thinks they’ve been spotted, they’re more likely to leave.”

As a result of the rise in shoplifting offences, more retailers have invested in crime-prevention technology, such as CCTV and anti-theft devices, and deploy guards wearing bodyworn cameras. In-store security costs are at a record high, reaching £1.8 billion in 2023-24, according to the British Retail Consortium (BRC).

Waitrose has bolstered its security by teaching staff to “love-bomb” customers — the technique involves employees being extra-attentive and helpful in an attempt to stop theft at its stores.

The BRC has criticised police forces for a widespread unsatisfactory response to reports of shoplifting. The government has introduced draft legislation aimed at ensuring that “all shop theft is treated with the seriousness it deserves”.  thetimes.com


Retailers Seeing Fewer Theft Calls After New Initiative
A collaborative approach to combating retail crime in Waterford
A collaborative initiative launched last year to tackle the problem of shoplifting is paying off with police seeing a significant drop in theft calls from local businesses. The initiative, which began with eight participating stores and has grown to include 15, prompted increased patrols, quarterly meetings with the participating businesses, and real-time information sharing about theft trends and suspects.

Home Depot and Ulta Beauty have seen the most success with 70% and 60% fewer theft complaint calls from September 2024 — when the program was launched — to March of this year, police said. Complaints for the same period for Target were down 58%, Stop & Shop 55%, Best Buy 40% and Walmart 10%.

The town's business districts, especially Crystal Mall and Route 85, have always been a hot spot for theft, with concerns dating back to the 1980s when the mall first opened. Chief Marc Balestracci's attempt to address the town's two biggest call-for-service complaints — traffic and theft — led to the formation of a traffic unit, which freed up officers for more frequent retail patrols.

Sgt. Patrick Epps and Officer Andrew Reed, who lead the shoplifting initiative, are in charge of running the meetings and sharing information with attending store representatives.

The primary purpose of the quarterly Zoom meetings with store managers or loss prevention staff is to disseminate any relevant information on retail thefts, including trends used by thieves and profiles of known suspects. theday.com


Crime Data Debate Heats Up
In Battle Over D.C. Police, Federal Prosecutors Open Inquiry Into Crime Data

The same U.S. attorney’s office that praised a drop in crime in the capital in April has begun an investigation into the Police Department resisting President Trump’s takeover.

The U.S. attorney’s office in Washington, D.C., has opened an investigation into whether city police officials falsified crime data, according to two people familiar with the matter, another salvo in the feud between federal and local authorities after the Trump administration seized control of law enforcement in the nation’s capital.

The investigation is likely to prompt new criticism that the administration is using the levers of the criminal justice system to pursue the president’s political opponents. In justifying his takeover of the city’s police force, President Trump has claimed crime in Washington is worse than the statistics show.

How tabulating crime data from the local police could amount to a federal crime is not immediately clear, the two people said, though the effort aims to determine if there were false statements or fraud involved in producing the data.

Prosecutors working for the U.S. attorney, Jeanine Pirro, opened the investigation in recent days, said the people, who spoke on the condition of anonymity to discuss a continuing inquiry. nytimes.com


Another Retail Forced to Close Stores Over Theft
Fred Meyer to close Everett, Kent stores over theft, regulatory issues
Fred Meyer’s parent company Kroger is closing two locations in Kent and Everett, citing concerns over theft and regulations, as part of a national effort to cut costs following the company’s failed merger with rival Albertsons.

“Unfortunately, due to a steady rise in theft and a challenging regulatory environment that adds significant costs, we can no longer make these stores financially viable,” a Fred Meyer spokesperson said Monday in an emailed statement about the Everett and Kent closures.

Monday’s announcement, which follows several other recent Kroger closures in Washington, sparked concerns in Kent and Everett, where locals worry over declining access to grocery stores, especially in underserved neighborhoods. seattletimes.com


DC restaurant dining plunges as Trump's crime crackdown continues, data shows

Roanoke City Police officials discuss crime data center