Otago University in New Zealand recently carried out some interesting research with the retailers in that country.

Firstly they asked retailers what percentage of retail staff do they feel were responsible for product shrinkage from the company, the answer given was 15%.

Retailers believed that 81% of shrinkage came from customers and 4 % came from suppliers.

This perception was along way from the truth. The facts are 48% of shrinkage comes from staff and suppliers and 51% comes from customers. Internal shrinkage management is as important as external shrinkage management.

Shrinkage has increased in the global recession. I am told that it has increased by 30% over the last twelve months, but the investment in retail security has fell by 11% in the same period. For every item stolen in most retail stores the retailer has to sell 20 more to recoup the costs.

A 2.3% shrinkage in most stores is equivalent to a 25% profit loss. The average shrinkage in retailing across the world is 1.5%.The aim should be 1%.

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