ACADEMIC VIEWPOINT
2015 NRSS Executive Summary
by Richard C. Hollinger, PhD Dr. Hollinger is professor and chair of the Department of Sociology and Criminology & Law at the University of Florida, Gainesville. He is also director of the Security Research Project, which annually conducts the National Retail Security Survey. Dr. Hollinger can be reached at rhollin@ufl.edu or 352-294-7175. © 2015 Richard C. Hollinger
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or over twenty years the industry has recognized and used the National Retail Security Survey (NRSS) as a key benchmark for retail loss prevention. This retail security research project studies numerous elements of workplace-related criminality, along with identifying successful security counter-measures to protect people, assets, and brands in the retail industry. Now in its twenty-fourth year, the NRSS is a nationwide annual study comprising the most recent empirical data on retail loss prevention. The University of Florida and National Retail Federation have partnered for over a decade to conduct this industry-standard research, which covers retail protection issues across inventory shrinkage, employee integrity screening, awareness programs, external retail crime, and more.
■ Toys—2% ■ Warehouse ■ Other
Key Findings
Retailers surveyed reported an average shrinkage of 1.38 percent at retail in 2014. This is the lowest shrinkage percentage level observed in the history of the NRSS. This continues the declining trend in shrinkage percentages observed over the past few studies. Out of total retail sales of $3.19 trillion in 2014, inventory shrink represented $44.02 billion in lost sales. There is no other property crime that costs the American economy more than these non-violent offenses occurring in the retail store. Grocery stores and supermarkets surveyed reported the highest average shrinkage calculated at retail across the four categories for which we were able to segment results—3.23 percent (median of 2.71%). By contrast, men’s and women’s specialty apparel retailers and department stores surveyed experienced shrinkage of 1.22 percent, while sporting goods and recreational products retailers reported somewhat lower shrinkage at 1.17 percent. Retailers who operate between 1,001 and 2,000 stores reported an average 1.72 percent (median of 1.22%) shrinkage, whereas for retailers surveyed at the far end of the spectrum (2,000 stores or more) the average shrinkage was 1.23 percent. Average shrinkage rates decreased or remained flat for more than six out of ten retailers. Overall, almost two-thirds of retailers surveyed noted that their shrinkage rates in 2014 either decreased (42.2%) or remained flat (20.5%), reflecting success in implementing anti-theft measures, training, and internal processes to reduce shrinkage and its impact to the bottom line. Men’s and women’s specialty apparel retailers and department store results were largely in line with retailers overall. However, five out of the seven sporting goods retailers who reported on shrink trends—as well as four out of six grocery stores and supermarkets—noted more of an increase in shrinkage. Among companies operating over 2,000 stores, six out of nine saw a decrease in their shrinkage rate in 2014. In the past retail LP departments have been expected to “do more with less” as budgets decline. In this study loss prevention budgets for 2014 averaged less than 1 percent of total 2014 sales. The good news is that over one-third (39.4%) of retailers surveyed reported that their loss prevention budget in 2015 is increasing over 2014 levels. Finally, the budget decline is being reversed. We also asked about the size of the LP team. Company-wide loss prevention programs in
Methodology
The 2015 NRSS was conducted online from March 24 to April 30, 2015. Retail loss prevention executives were sent an email invitation with a link to the survey, so they could participate anonymously. A total of 100 retail chains participated in the 2015 survey, although not all companies answered all questions. In our analysis of the data for each question, we removed select instances of extreme outliers that might have distorted the overall results. Here is the profile of retailers that participated in the study: ■ Auto parts, tires, and accessories—1% ■ Books, magazines, and music—1% ■ Cards, gifts, floral, and novelties—1% ■ Consumer electronics, computers, and appliances—2% ■ Convenience store or truck stop—1% ■ Crafts and hobbies—2% ■ Department store—11% ■ Discount, mass merchandise, or supercenter—7% ■ Drug store or pharmacy—3% ■ Furniture—3% ■ Grocery and supermarkets—9% ■ Home improvement, building, hardware, lumber, and garden supply—4% ■ Household furnishings and housewares—2% ■ Jewelry and watches—3% ■ Liquor, wine, beer, or tobacco products—2% ■ Optical goods and services—1% ■ Pets and animal supplies—1% ■ Shoes and footwear—4% ■ Specialty children’s apparel—3% ■ Specialty women’s apparel—4% ■ Specialty men’s and women’s apparel—13% ■ Sporting goods and recreational products—9%
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club—1% (including music, restaurant, garden, theme park)—10%
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