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Shrinkage rate is the percentage of loss of products
between manufacture and point of sale.
The study, Global Retail Theft Barometer was conducted between June 2006
and 2007 by Centre for Retail Research, England and is considered the
largest survey of retail crime and loss in the world.
"Tracking and measuring shrinkage in India is difficult and large
retailers are becoming proactive only now," says R Kannan, director
of retail consultancy firm RAMMS India, adding, "It's tough to differentiate
between customer and employee theft in India."
Other countries with high shrinkage rates are: Thailand (1.65%), US (1.52%),
Canada (1.48%) and Australia (1.39%). Austria (0.94%), Switzerland (0.96%)
and Iceland (1%) had low rates.
The survey also found that customer theft is responsible for 42% of shrinkage
($41,504 million).
Disloyal employees cost 35.2%, internal error and administrative failure
was 16.5% and supplier theft and fraud was 6.3% .
The most-stolen items included branded and expensive products: cosmetics
and skincare, alcohol, women's apparel, perfumes and designer wear. Other
highly stolen lines included razor blades, DVDs/CDs, video games and video
consoles, small electric items and fashion accessories. "In India,
lingerie, cosmetics, batteries and small food items are the most commonly
flicked," says Kannan.
Retailers in the US, Canada, Australia and Iceland reported that employee
theft was higher than customer theft. The average amount stolen by apprehended
customer thieves was $270, while employee thieves stole $1,967 - seven
times more than customers.
In contrast, customer theft was seen as the greatest source of loss for
Asia-Pacific countries amounting to 52.6% ($8,031 million), while employee
thieves accounted for 21.9% ($3,335 million).
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