Consumer Behavior

Retail shrink hit nearly $100B in 2021

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September 29, 2022

Retail shrink accounted for $94.5 billion in losses in 2021, up from $90.8 billion in 2020, according to the 2022 National Retail Security Survey from the National Retail Federation.

Organized crime is a "critical component" of the shrink, according to a press release on the survey findings.

"The factors contributing to retail shrink have multiplied in recent years, and ORC is a burgeoning threat within the retail industry," NRF Vice President for Research Development and Industry Analysis Mark Mathews said in the release. "These highly sophisticated criminal rings jeopardize employee and customer safety and disrupt store operations. Retailers are bolstering security efforts to counteract these increasingly dangerous and aggressive criminal activities."

The survey found the average shrink rate in 2021 was 1.44%, a slight decrease from the last two years but comparable to the five-year average of 1.5%.

The majority of retailers report that in-store, e-commerce and omnichannel fraud have risen. Violence is a growing area of concern and retailers are prioritizing addressing guest-on-associate violence, external theft and ORC, according to the survey.

A majority (87.3%) of retailers polled said the pandemic resulted in an increase in overall risk and cited an increase in violence (89.3%), shoplifting (73.2%), ORC and employee theft (tied at 71.4%) as a result of the pandemic.

The top five cities/metropolitan areas affected by ORC in the past year were Los Angeles, San Francisco/Oakland, New York, Houston and Miami.

"Reducing instances of violent crime, particularly those affiliated with ORC, is a key priority among retailers because it directly and immediately impacts employees in numerous capacities," Loss Prevention Research Council Senior Research Scientist Cory Lowe said in the release. "In many cases, it is difficult to measure the full extent of these crimes without being investigated internally and in coordination with law enforcement."

The survey was done in partnership with the Loss Prevention Research Council and is sponsored by Appriss Retail.