REPORT: SHRINK SHRINKS IN '96, BUT EMPLOYEE 'LIFTING' RISES

HOUSTON -- Retail shrink losses among supermarkets in 1996 represented 2.01% of overall sales on average, a slight decrease from the year prior when losses averaged 2.09% of sales, according to a new report released last month.Losses attributed to employee theft, however, were on the rise and represented 55% of retail shrink, the highest figure reported since 1992. Shoplifting, too, hit new highs

HOUSTON -- Retail shrink losses among supermarkets in 1996 represented 2.01% of overall sales on average, a slight decrease from the year prior when losses averaged 2.09% of sales, according to a new report released last month.

Losses attributed to employee theft, however, were on the rise and represented 55% of retail shrink, the highest figure reported since 1992. Shoplifting, too, hit new highs in 1996 and accounted for 27% of shrink losses compared with 24% in 1995.

Those are among the key results uncovered in the 1997 Supermarket Shrink Survey of 258 food retailers representing more than 4,000 stores. Highlights of the report were released at the MarkeTechnics convention held here last month. SN obtained the full report, prepared by the National Supermarket Research Group, Centerville, Ohio, last week.

As losses attributed to employee theft and shoplifting crept upward in 1996, all other factors contributing to shrink dipped. Back-door receiving discrepancies dropped from 9% of overall shrink in 1995 to 8% in 1996, losses due to damaged merchandise fell from 7% to 5%, accounting errors fell from 5% to 2% and retail pricing errors slipped from 4% to 3% of overall shrink losses.

Employee theft remains the single-largest contributor to retail losses, continuing an eight-year trend. Losses attributed to cashier theft and error accounted for more than 25% of all shrink, the report said.

Organized theft among cashiers was reported by 71% of survey respondents and the average cumulative loss per "theft ring" incident was $8,423 in 1996, up dramatically from $2,760 in 1995.

The shrink survey, conducted annually for the past eight years, also quantified shrink due to other factors and analyzed losses in-depth by store department. In addition, the report examined retailers' loss prevention "best practices" and how those policies and technology programs affected shrink losses.

The National Supermarket Research Group is a nonprofit organization that researches retail shrink losses. Corporate sponsors of the 1997 report include the National Grocers Association, Reston, Va.; MidSouth Data Systems, Taylors, S.C.; NCR, Dayton, Ohio; Sensormatic Electronics, Boca Raton, Fla.; Trax Software, Centerville, Ohio; and Senn Delaney, a unit of Arthur Andersen, New York.