Feature
IS HIGHER SHRINK
INEVITABLE IN A
GLOBAL RECESSION?
Research has consistently shown that theft rises in tough
economies. But not every retailer experiences higher shrink
in down times. Here are some reasons why, and what
retailers can do to fortify their operations.
THE global recession has affected
individual countries – and
businesses within those countries –
in very different ways. Cultural,
legal, demographic and economic
considerations vary all over the
world, which means it’s difficult to
predict the exact response by
people to unfortunate situations
like collapsing industries, lower
wages and job losses. But one
thing is for sure: In every country,
the impact of the economic
downturn has come quickly, and
retailers often are bearing the
brunt.
As we all know, retail historically
has been one of the first sectors of
the economy to feel the pinch of a
recession, and this one may have
had an even more acute impact on
retailing. Without question, stores’
sales and profits have suffered
extensively, driven to a large
degree by big changes in shopping
patterns and the reality that Is fraud in IS IT INEVITABLE? forward-thinking approach to loss
customers have become more recession Against this backdrop of bad prevention. In fact, some clear best
frugal in their spending habits inevitable? economic news and retail crime practices are emerging that smart,
(Verdict, 2009; Bamfield, 2009). trends, it might be natural to be successful retailers already are
Although some retailers have pessimistic about retailers’ abilities putting in place.
actually benefited from the to strengthen their operations Let’s take a moment to get
change in business conditions, against shrink. But in a way, the bad agreement on a fundamental
speakers at the World Retail news is an opportunity for retailers question: Is crime rising? Reports
Congress said that retailers in to re-examine their policies, analyse from both retailers and police show
virtually every country are their use of shrink management that as unemployment has risen,
experiencing the most challenging technology, and develop a more there has been an increase in retail
market in decades. comprehensive, integrated and crime. For example a European
22 • RETAIL FRAUD
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