Canadian retailers are losing an estimated $4 billion a year – $10.8 million a day – through “shrinkage,” according to a new PwC survey.
Shrinkage is loss of inventory through theft, errors in accounting and inventory control, fraud and damage, according to PwC’s 2012 Canadian Retail Security Survey, which was conducted in conjunction with the Retail Council of Canada (RCC).
Respondents in the survey reported an average inventory loss of 1.04%, lower than the 1.42% reported by retailers in the U.S.
The top retail items targeted by light-fingered employees and professional thieves included alcohol, women’s clothing, cosmetics and fragrances.
The report found that external theft from shoplifters and other thieves has declined since 2008, while internal theft from employees has risen. Increased use of technology, such as surveillance equipment, appears to have been partly responsible for the decline in shoplifting.
“Due to the nature of its business, the retail industry tends to be at greater risk to internal crimes such as employee theft,” said Stephen O’Keefe, RCC vice-president of operations.
“The focus for employers is to create a heightened sense of awareness and need for staff to be a part of the solution, which has resulted in more reporting of incidents than ever before.”
The report concludes that retailers could significantly reduce inventory loss with use of technology, including radio frequency identification (RFID), which can give retailers better controls over their goods.
