Theft by staff, shoplifting roil Indian retailers
While recession hit retailers are busy cutting cost, searching for a rebound, a recent study — The Global Retail Theft Barometer, 2009 Survey — has revealed that India has the highest retail shrinkage (as a percentage of sales) in the world.
Retail shrinkage is the difference in the value of stock as per the books and the actual stock available in the shop. Major sources for this are seen to be employee theft, shoplifting and internal errors.
According to the report, funded by Checkpoint Systems, shrinkage in India increased by 3.2 per cent to US$2.6 billion, the highest among 41 countries that were surveyed from across the world. This is an added problem for a sector which is expected to see a 15-18 per cent dip in revenue. Assessing the theft pattern, one finds that shoplifting constitutes for about 45.2 per cent of shrinkage followed by employee theft (23.3 per cent) and internal error/process failures (22.6 per cent).
Security spending
The most vulnerable verticles identified by the report include apparel, pharmacy, grocery, hardware and electronic goods among others. Further, recession and conservative security spending has led to US$82 million increase in the shrinkage value over 2008, the report said, adding that the security spending in India — US$158 million — represents only 0.19 per cent of retail sales, as against the global average of 0.31 per cent.
According to Checkpoint Systems Country Manager Dharmesh Lamba “while many retailers have had to cut budgets in most areas, this year’s study shows that the adverse effect of cost cutting too deeply in the area of loss prevention.” “Prudent spending in this area can have a positive effect on the bottom-line numbers, and a ct as a force-multiplier as budgets for training programmes and security personnel are reduced,” he added.
Pointing out that shrinkage in the Asia Pacific region this year is US$17.9 billion, the report showed India amounts to US$2.6 billion of that figure and represents an average of 3.2 per cent of the retail sales which is higher than both the Asia Pacific Region (1.24 per cent) and the global average of 1.42 per cent.
