Organized retail crime rings blamed for $112 billion inventory loss in 2022.
Losses from Retail Theft Soar to $112.1 Billion in 2022, Prompting Drastic Changes in the Industry
According to a new survey released by the National Retail Federation, losses from retail theft have skyrocketed to $112.1 billion in 2022, up from $93.9 billion in 2021. This alarming increase has forced retailers across the nation to rethink their strategies or, in some cases, close their doors for good.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” said David Johnston, NRF’s vice president for asset protection and retail operations.
Survey Highlights
The survey, which gathered data from 177 retail brands in various sectors, including apparel, jewelry, grocery, and department stores, revealed the following:
- Organized retail crime (ORC) is the top concern for retailers, with 67% reporting a spike in violence from ORC gangs compared to the previous year.
- 28% of retailers had to close specific locations, 45% reduced operating hours, and 30% had to alter their in-store product selection due to crime.
- As a result of increased violence, more retailers are adopting a “hands-off” approach to protect their employees, with a 17% rise in retailers instructing their staff not to apprehend shoplifters.
While retailers prioritize employee safety, they are also ramping up prevention efforts. This includes hiring outside security personnel, investing in technology and software solutions, and providing workplace violence training for employees.
“Retailers are piloting and implementing a number of loss prevention practices to deter, prevent, and mitigate these substantial losses,” said Loss Prevention Research Council Director Read Hayes.
Impact on Metro Areas and Stolen Products
The survey identified the metro areas hit hardest by ORC as Los Angeles, San Francisco, Oakland, Houston, New York, and Seattle. Additionally, the types of products stolen are no longer solely based on price but on their ability to be quickly resold. While luxury goods remain popular targets, items such as outerwear, batteries, energy drinks, shoes, and kitchen accessories are now in high demand among thieves.
Retailers Taking Action
Target, for example, recently announced the closure of nine stores across four states due to theft concerns. The retailer emphasized the importance of maintaining a safe environment for both employees and customers. Other retailers, including Macy’s and Dick’s Sporting Goods, have also expressed concerns about the impact of retail theft on their businesses.
As the retail industry grapples with this crisis, it is clear that innovative solutions and collaborative efforts are needed to combat the rising tide of retail theft.
How much did the average dollar amount of each act of retail theft increase compared to the previous year?
Mpared to the previous year.
The significant increase in losses due to retail theft has placed a heavy burden on retailers, particularly small businesses. These losses not only affect their bottom line but also impact their ability to invest in growth, hire employees, and provide competitive pricing to their customers. Retailers are now faced with the challenge of balancing security measures to protect their inventory without negatively impacting the shopping experience of their customers. Many have invested in technologies such as artificial intelligence-based surveillance systems, RFID tags, and inventory management systems to combat theft. However, these solutions come with substantial costs and implementation challenges. “Retailers are caught in a catch-22 situation. They need to strike a delicate balance between implementing strong security measures to deter theft while providing an open and welcoming environment for their customers. Failure to do so can result in lost sales and damaged customer trust,” remarked Sarah Thompson, a retail analyst at Lendmark Financial. The surge in retail theft has prompted industry-wide changes in order to minimize losses and protect the future of retail businesses. Some of the key changes being implemented include: Industry experts believe that these changes, combined with a continued effort to raise awareness about the consequences of retail theft, will help deter criminals and reduce losses in the long run. While retailers are taking steps to combat retail theft, consumers also have a role to play in curbing this issue. It is crucial for customers to be vigilant and report any suspicious activities they witness in stores. Additionally, customers should encourage responsible shopping behavior by not purchasing stolen goods and supporting retailers who take proactive steps to prevent theft. The rise in retail theft and its escalating financial impact on businesses and consumers calls for a collaborative effort to address the issue comprehensively. Only through the joint effort of retailers, law enforcement agencies, and consumers can the industry overcome this challenge and ensure the continued prosperity of the retail sector.The Impact on Retailers
Changes in Industry Practices
The Role of Consumers
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
