€500 million worth of merchandise stolen

  • Thefts committed by employees and suppliers and administrative errors must be added to store thefts: “shrinkage”
  • This represents a loss of close to one billon EUR in 2012 for Belgian retailers.

It’s what the retail sector calls “shrinkage”. It’s a technical term that combines store thefts, merchandise thefts by staff, fraud committed by suppliers and administrative errors. The security company, Checkpoint Systems, evaluates these losses each year and the losses grew again last year in Belgium. “It’s a sensitive subject that retail companies don’t like to talk about,” explains Checkpoint System’s international account manager Dominique Reumers.

 

The “Theft Barometer in the Retail Industry 2012-2013,” developed by the Euromonitor International consulting firm, estimates shrinkage at 1.3% of turnover in the industry in Belgium, or €975 million. Since the calculation method has been modified, it’s difficult to make comparisons with previous reports. Last year the shrinkage rate was 1.47% or a total of €915 million, but the study included Belgium and Luxembourg as a single country. Shrinkage is divided into 47% customer thefts, 28% thefts by staff, 15% administrative errors and 10% fraud committed by suppliers.

 

In 2012 Belgium ranked in the global overall average or 1.4% shrinkage. On a global scale that represents a loss of close to €89 billion for merchants. Belgium does better than Mexico (1.6%), Brazil (1.6%) or France (1.4%) but not as well than Great Britain (1.2%), Germany (1.1%) or Japan (1.0%).

 

“Opportunistic theft”

According to Dominique Reumers, theft from stores is growing. “It’s tied to the growth of professional and semi-professional crime,” he explains. These thefts are more organized, and they are destined for resale networks that aim at high-end goods including construction materials, electronic tablets, smartphones and brand-name clothing.

 

“The other scenario is opportunistic theft of small items like batteries, perfume, fashion accessories, and underwear,” Dominique Reumers explains. According to him, the crisis lowered the threshold for committing the deed. “Teenagers ask for electronic gadgets or pricey brand-name clothes and their parents rarely refuse,” he continues. “But if they have financial troubles, parents no longer hesitate to steal razor blades or cosmetics for themselves.” Another effect of the financial crisis: merchants now have to face the fact of increased food thefts, including meat, fish and cheese.

 

According to Checkpoint Systems’ statistics, shrinkage represents a total of €205 per Belgian household. “Someone has to pay for the loss,” Dominique Reumers explains. “Either it’s built into the price, and it’s the consumer who has to pay or, when competition makes price increases difficult, the retailer has to take on the loss by trimming their profit margins. The fact is that it’s usually the consumer who pays.”

 

BERNARD PADOAN

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