Singapore retail shrink rate rises for first time in three years
The fifth annual edition of the Global Retail Theft Barometer revealed that over the past year, Singapore retailers incurred SGD222.59 million (US$174 million) in total shrinkage, which refers to inventory loss from customer, employee or supplier/vendor theft as well as administrative errors – the local industry’s highest since 2008.
While this amount was the lowest in Asia-Pacific, Singapore’s shrink rate increased by 3.4% in 2011, representing the first time in three years that it has risen. The Asia-Pacific average rate of increase is 0.8%.
The highest contributor to shrinkage in the Singapore retail industry was customer theft, accounting for 53.0%, the third-highest percentage in the region. Employee theft contributed to 24.2% of shrinkage, slightly above the Asia-Pacific average of 22.7%. Internal error resulted in 15.4% (Asia-Pacific average 17.1%), while supplier/vendor theft made up 7.4% (Asia-Pacific average 6.9%).
The study, conducted by Checkpoint Systems, monitored the costs of shrinkage in the global retail industry between July 2010 and June 2011. The research found that despite an overall decrease in retail theft last year, global shrinkage has again grown at a remarkable rate, to 6.6%, or SGD152.23 billion (US$119 billion).
Singapore consumers and their families compensated for the retail losses by paying an “honesty tax”, or increased prices, at an average of SGD66.11 (US$51.68) per head, or SGD224.76 (US$175.70) per family. Singapore’s honesty tax is the third-highest in the region.
Paul Chu, President, Asia-Pacific, Checkpoint Systems, said, “Retailers around the world are going to continue facing security and inventory pressures because of all the strains on the global economy, such as rising commodity costs, inflation and unemployment. By recording an increased shrink rate for the first time in three years, Singapore has proven that it is not immune to the security threats being posed to its operations and stock from various quarters."