Organized Crime Hits Almost All Retailers

June 13, 2011

This article is included in these additional categories:

Financial Services | Government & Politics | Retail & E-Commerce | Uncategorized

nrf-orc-june-2011.JPGOf the 129 retail companies surveyed by the National Retail Federation (NRF) this year, nearly all (94.5%) have been the victim of organized retail crime in the past 12 months. Data from the “2011 Retail Organized Crime Survey” indicates this is a 6% increase from 89.5% of retailers that were victimized from May 2009-May 2010.

2 in 3 Retailers Report Increased Organized Crime

In addition, almost two-thirds of retailers (64%) report they have seen an increase in organized retail crime over the same time frame, up 8% from last year (59%). The NRF attributes organized retail crime losses to several factors including lower staffing levels at stores; the ease of selling stolen merchandise online, in pawn shops/flea markets and other fencing operations; and the current economic environment, which is ripe with consumers looking for low prices.

Half of Retailers Suffer Cargo Theft

nrf-cargo-theft-june-2011.JPGFor the first time in this year’s survey, the impact of cargo theft was evaluated. According to the survey, almost half (49.6%) of retailers were victims of cargo theft within the past year. Most of these thefts occurred en route from the distribution center to the store (57.4%), though retailers often experienced cargo theft from the manufacturer to the distribution center (39.7%), from one store to another (10.3%), at the distribution center (22.1%) and when the items arrived at a store (17.6%).

Las Vegas, Phoenix Join Top 10 Cities List

Last year survey respondents reported the top cities organized retail crime gangs targeted. This year, survey responses were very similar. The top cities in alphabetical order include:

  • Atlanta, GA
  • Chicago, IL
  • Dallas, TX
  • Houston, TX
  • Las Vegas, NV
  • Los Angeles, CA
  • Miami/Ft. Lauderdale, FL
  • New York, NY/Northern NJ
  • Philadelphia, PA
  • Phoenix, AZ

Las Vegas and Phoenix are two new additions to the list, replacing San Francisco and the Baltimore-DC-Northern Virginia corridor, which the NRF says both continue to be areas with high organized retail crime activity. Four of the top 10 cities are in the South (Atlanta, Dallas, Houston, Miami), two are in the Southwest (Las Vegas, Phoenix), two are in the Northeast (New York, Philadelphia), and one each are in the Midwest (Chicago) and West (Los Angeles).

Other Findings

  • Eight out of ten retailers (84.8%) believe organized retail crime activity has increased in the last three years.
  • Nearly half of retailers (46.5%) polled report they are allocating additional resources toward fighting organized retail crime, a modest decrease from last year (48.4%).
  • When asked how organized retail crime ranks as a threat to their company, 26.7% of retailers rated the problem as a “severe” or “significant” threat to their company. On average, retailers rated organized retail crime as 2.87, which is slightly up from last year’s 2.67 rating.

RILA: Recession Increases Retail Shrink Threats

The ongoing economic recession has caused many retailers to both experience higher levels of shrink and make combating shrink a higher priority, according to “Loss Prevention 2010: Retailers Battling Shrink in Tough Times,” a study developed in partnership by Retail Systems Research and the Retail Industry Leaders Association (RILA).

According to the study, 44% of retailers said the economy caused shrink to rise in 2009, and another 37% said it stayed about the same. Only 20% said it fell. Not surprisingly, 68% of retailers said the priority of shrink increased between 2007 and 2009, and another 25% said it stayed about the same, with 7% saying shrink became a less critical priority.

Despite these percentages, almost half of retailers said their shrink levels are better than the industry average of 1.6% of sales. Forty-seven percent said their shrink levels are better, 30% said they are about the same, and 22% said they are worse.

About the Data: The 2011 NRF Organized Retail Crime survey was conducted from April 19 – May 10, 2011 by the National Retail Federation. Senior loss prevention executives at 129 retail companies completed the survey.

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