Five Contextual Factors Which Increase Retail Shrinkage

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In order to understand the factors which impact retail shrinkage, we must first analyse data at a store level, to see how this relates to some socio-demographic, economic and criminal contextual factors.

An in-depth crime study revealed that stores located in areas with lower GDP per capita and in more densely populated cities recorded higher shrinkage.

Larger stores and extended opening hours seem to also increase shrinkage rates. This is likely to be related to the increased difficulty in providing sufficient surveillance. These results are also confirmed, at least in the UK, by the Home Office survey, which proves that larger businesses are more likely to have a higher incidence of crime.

 According to the Retail Security In Europe report, being located within 500 metres of an underground or train station also increase the level of shrinkage in shops. This is likely to be because stores close to transportation hubs are likely to be highly crowded and have a higher rate of irregular customers. On the other hand, the proximity of stations may offer criminals a faster way to exit.

Finally, stores located within shopping malls experienced on average lower shrinkage. In 2017, shrinkage was significantly higher in stores located on streets (1.5%) than in those located within shopping malls (0.8%). This was down to the different management practices across different stores, and not necessarily by environmental factors.

If you’re looking to gain full visibility into shrinkage in your retail estate, get in touch!

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Mike Jeffs
Mike Jeffs

Further Reading

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