Organised crime costs U.S. retailers $30 bln
Organised crime takes a huge bite out of retail sales, as much as $30 bln in the past year. That is slightly more than all the annual revenue of Sears Holdings Corp., parent of Sears and Kmart.
A new study by the National Retail describes the magnitude of the problem:
“Retail loss prevention executives have their hands full, and when it comes to the organized crime gangs that wreak havoc on their stores, their inventory and their bottom line, retailers are getting more aggressive in their efforts to fight the $30 bln problem. According to the National Retail Federation’s 11th annual Organised Retail Crime Survey, which polled 67 senior retail loss prevention executives, nearly all (97%) retailers surveyed report that they have been a victim of ORC in the past year, up from 88.2% who said so last year.”
So, the size of the problem is extraordinary and can be added to the widespread problem of shoplifting by both consumers and employees. It is a wonder that, between organized crime gangs and shoplifting, retailers have any profits at all.
And the effects based on the bite organized crime takes are
“Retailers on average report they have lost $453,940 per $1 bln in annual sales over the past year. Additionally, the survey found on average retailers allocate approximately $434,032 to specific organised retail crime personnel in their company.
Among the primary efforts used by criminals are cargo theft and the misuse of gift card and return policies.”
The survey showed that much of the activity is concentrated in several cities: Los Angeles, Miami, Chicago, New York, Houston, Arlington/Dallas/Ft. Worth, San Francisco/Oakland, Baltimore, Orange County, Calif., Northern New Jersey.
While many retailers have called on and been helped by law enforcement groups, the progress has been modest:
“NRF asked retailers about the support they get from law enforcement in the states where they have a presence and that have ORC laws, and the survey found 15.4% of those surveyed say they have noticed an increase in support from federal law enforcement, up from 9.6% who said so last year; 43.1% say they’ve noticed an increase in support from local/county law enforcement and 24.6% say support from state law enforcement has grown.”
So modest that the criminal activity may be outpacing help from legal authorities.