Request a Demo

Please submit your information to receive a copy of this Case Study

I agree to Petrosoft Privacy Policy, including the processing of my data to provide the information requested.

Each year, many organizations publish loss prevention statistics. We’ve highlighted data from the National Retail Federation (NRF) and the National Association of Convenience Stores (NACS).

NRF Shrink Statistics

Who is the NRF? The National Retail Federation (NRF) define themselves as the world’s largest retail trade association.

  • Total inventory shrink for the retail industry in 2020 was $70.4 billion in losses
  • The average shrink rate for the retail industry is 1.6% of inventory for 2020
  • 53% of those surveyed said internal theft was a top priority
  • The average dollar loss per employee theft is $1,551.66 per case
  • The average dollar loss per shoplifting incident is $461.86 per case
  • The average dollar loss per robbery incident is $7,594.48 per case
  • For 2021, 50% of those surveyed said they would specifically invest in loss prevention (LP) equipment

NACS 2020 Shrink and Spoilage Statistics

Who is NACS? The National Association of Convenience Stores (NACS) is a leading global trade organization for convenience and fuel retailers.

If you are a convenience store operator, manager, or just curious, you can find both average shrink and spoilage rates by company size below.

  • Average merchandise shrink for 1-10 stores was $2,868 per store per year
  • Average merchandise shrink for 11-50 stores was $9,024 per store per year
  • Average merchandise shrink for 51-200 stores was $9,000 per store per year
  • Average merchandise shrink for 201-500 stores was $14,208 per store per year
  • Average merchandise shrink for 500+ was $19,704 per store per year
  • Average spoilage for 2020 for 1-10 stores was $10,188 per store per year
  • Average spoilage for 2020 for 11-50 stores was $8,604 per store per year
  • Average spoilage for 2020 for 51-200 stores was $13,908 per store per year
  • Average spoilage for 2020 for 201-500 stores was $33,708 per store per year
  • Average spoilage for 2020 for 500+ was $62,328 per store per year

References:

https://nrf.com/media-center/press-releases/retail-sales-now-exceed-444-trillion-2021-nrf-revises-annual-forecast

https://cdn.nrf.com/sites/default/files/2021-08/2021%20National%20Retail%20Security%20Survey%20updated.pdf

https://www.convenience.org/Research/SOISurveys

Whether it’s merchandise, food, fuel, lottery or other inventory, having to write off inventory can be disheartening and frustrating, especially if you can’t figure the root cause. Although a grab-and-run theft leaves no mystery as to the reason, internal theft can go unnoticed for months between your inventory counts.

So How Does Shrink Occur?

  • Internal theft
  • External theft
  • Spoilage
  • Misplacement
  • Erroneous register rings
  • Short deliveries

Any number or combination of those factors can cause shrink, so let’s explore each cause in depth.

Internal Theft, Inside Jobs

There are many ways for retail employees to steal inventory from a convenience store. They may do this during their shift or while the business is closed. Convenience store employees might:

  • Hide merchandise or other goods in their clothes (pockets, shoes), a handbag or backpack and take it out at lunch break, smoke break or at the end of their shift.
  • Consume inventory in the store, including scratcher lottery tickets.
  • Remove inventory from the building in the trash and retrieve it later.
  • Provide items free to co-workers, family members or friends.
  • Ring up a “no sale” on a cash register while still transacting the sale, pocketing the money and shorting inventory.
  • Ring up a low-priced item up on the register but hand over a more expensive item to the customer.

External Theft, Shoplifting and Organized Crime

External threats can include employees working externally with gangs or the gangs may work on their own to steal goods. Some of the top methods used by shoplifters and organized crime are:

  • Grab and run.
  • Concealment using the restroom.
  • Creating distractions and concealing the item(s), sometimes planned and sometimes opportunistic.
  • Using a booster bag, false bottomed boxes and specially rigged bags to conceal the item(s).
  • Fraudulently returning items, either by trying to return a stolen item without a receipt or by buying a legitimate item and stealing the same items, duplicating the receipt, and using the duplicate receipt to return the stolen item.

Popular items stolen by gangs? In the NRF 2021 report*, these are the top 12 items stolen:

  • Designer clothes
  • Laundry detergent
  • Designer handbags
  • Allergy medicine
  • Razors
  • High-end liquor
  • Denim pants
  • Pain relievers
  • Infant formula
  • Teeth whitening strips
  • Energy drinks
  • Deodorant

Spoilage

Items such as fresh produce, milk and other short shelf-life products need to be managed and reduced for sale to ensure they scan out before the expiration date. Although many people associate inventory cycle counts with high-risk items such as cigarettes, cycle counts are also useful for risk related to spoilage.

Misplacement

Can you really lose track of inventory at a convenience store? If items aren’t received correctly or moved from one location to another, it can be easy to lose track of stock, causing it to be written off.

Poor Product Scanning

Your store’s scan rate can help ensure that your inventory is sold and accounted for correctly. Not scanning items correctly creates issues when reconciling your physical to book inventory. See the short video below for additional information and how poor scanning leads to overstocks and understocks.

Short Deliveries

Whether intentional or not, shorted deliveries from your supplier or manufacturer cause your books to be out of balance with the store’s physical inventory unless you reconcile (count) the received items against the delivery (order) receipt and then file a discrepancy with the supplier or manufacturer.

Interested in learning more about how Loss Prevention Analytics can help you keep track of threats to inventory?

I’m Interested

Reference: https://cdn.nrf.com/sites/default/files/2021-08/2021%20National%20Retail%20Security%20Survey%20updated.pdf