Before you think that it is something good, let me tell you what shrinkage means. It is the politically correct term for shoplifting. So, the headline should have read “India tops Global Retail Theft Barometer 2008“. But, that would too straight forward for us.
Among the 920 retailers surveyed across 36 countries, India came out trumps with a shrinkage rate of 3.1% for 2008. India is closely followed by Mexico, Thailand, South Africa and Malaysia. (source)
The top 5 list :
India - 3.1% shrinkage of retail sales - equivalent to $2.54 bn
Mexico - 1.68%
Thailand - 1.59%
South Africa - 1.59%
Malaysia - 1.53%
The lowest shrinkage rate is found in Japan, Austria, Switzerland, Germany and Denmark.
$2.54 bn is a lot of money for a very fragmented retail market in India. The study is prepared by Center for Retail research and is funded by Checkpoint Systems Inc. Checkpoint provides solution for shrinkage reduction for many retailers. Pantaloons, Lilliput and Koutons are few of Checkpoint’s customers.
This retail shrinkage can be further classified into several categories.
Customer theft
Employee theft
Suppliers / Vendors
Administrative errors
Of these, 44% losses are coming from Customer theft.
In times like these, shrinkage prevention should be the top priority for the retailers. Consumer spending has reduced drastically in the last 2 months and if retailers cannot stop this outflow, it would pinch their bottom line like never before.
On a funny note though, we have some serious skills don’t we?
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