Customer Shoplifting, Disloyal Employees and Supplier Theft Costs the World's Retailers $98.6 Billion



    Figure represents an annual 'tax' on honest consumers of $287.70 per
household in the U.S. and Europe

    THOROFARE, N.J., November 14 /CNW/ - The first edition of the Global
Retail Theft Barometer, conducted by the Centre for Retail Research in
Nottingham, United Kingdom, and sponsored by Checkpoint Systems, Inc., offers
the first attempt to put a price tag on retail theft across the globe. The
study reveals new facts about actual levels of retail shrinkage and crime in
32 countries around the world, including 25 countries in Western and Central
Europe, as well as the U.S., Canada, Australia, India, Japan, Singapore and
Thailand.

    Eight hundred and twenty retail companies, operating 138,603 stores with
sales of U.S. $948 billion, provided the data used in this study. The
retailers taking part represented 16% of total European retail sales, 13% of
North American retail sales and 5% retail sales in Asia-Pacific.

    The results from the 32 countries surveyed show that global retail
shrinkage (stock loss from crime or waste expressed as a percentage of retail
sales) cost retailers $98.6 billion, representing an annual 'tax' on honest
consumers of $287.70 per household in the U.S. and Europe.

    At the same time, the global costs of retail crime (the cost of theft by
customers, disloyal employees, and suppliers and vendors, plus the cost of
loss prevention) were $108.1 billion.

    The largest source of shrinkage was Customer theft (shoplifting),
responsible for 42.0% of losses, or $41.5 billion. Employee theft accounted
for 35.2% ($34.6 billion), while 16.5% ($16.2 billion) of the global cost was
caused by internal errors and administrative failures (e.g., pricing or
accounting mistakes). Supplier or vendor theft and fraud are responsible for
the remaining 6.3% ($6.2 billion). In the U.S., Canada and Australia,
retailers reported that employee theft was higher than theft committed by
customers.

    Retailers have apprehended almost 6 million store thieves during this
year, and 87.5% of these thieves were customers. North American retailers
apprehended the largest number of employee thieves, while the majority of
customer thieves (3,481,490) were caught in Europe.

    "The results show that in all countries there are retailers who have
managed to reduce shrink, while shrink has risen for others, regardless of
regional location," explains Joshua Bamfield, Director of the Centre for
Retail Research. "This suggests that lower rates are the outcome of strategy,
policy and investment, not of factors related to the national environment."

    "The phenomenon of shrink must be taken seriously in the context of a
global economy," notes George Off, CEO, Checkpoint Systems, Inc. "Shrink cost
has an immediate impact on the margins of the global retail industry - an
industry on which the world's economy, particularly in many developing or
recently developed regions, depends for growth and stability. Retailers
worldwide are coming to the same conclusion: investing in shrink management
solutions is seen as a priority and can provide a significant return on
investment."

    
         The Most Frequently Stolen Merchandise From Global Retailers

    Top 5 Merchandise     N. America          Europe        Asia-Pacific
    ----------------- ------------------ ----------------- ---------------
                      Cosmetics &        Alcohol           Alcohol
    1.                 Skincare
    ----------------- ------------------ ----------------- ---------------
                      Ladies' Apparel    Cosmetics &       Cosmetics &
    2.                                    Skincare          Skincare
    ----------------- ------------------ ----------------- ---------------
                      Perfumes & Fine    Ladies' Apparel   Ladies' Apparel
    3.                 Fragrances
    ----------------- ------------------ ----------------- ---------------
                      Alcohol            Perfumes &        Perfumes &
    4.                                   Fine Fragrances   Fine Fragrances
    ----------------- ------------------ ----------------- ---------------
                      Designer Apparel   Razor Blades      High Cost &
                                                            Specialty Food
                                                            (e.g. meat,
                                                            cheese,
    5.                                                      seafood)
    ----------------- ------------------ ----------------- ---------------
    

    Internal Theft

    North American retailers apprehended a larger total and proportion of
employee thieves than retailers elsewhere. The number of retail thieves in
North America was 2.3 million (28.6% were fraudulent employees). Asia-Pacific
retailers apprehended 110,000 thieves (9.1% of which were dishonest employees)
and European retailers apprehended 3.55 million thieves (only 1.9% of which
were dishonest employees).

    The average cost of admitted or proven theft for shoplifters in North
America was $622. In Europe and Asia-Pacific it was $112 and $54 respectively.
However, the average employee theft incident in Europe cost $5,145 (reflecting
large financial frauds), compared with $206 for employee thieves apprehended
by Asia-Pacific retailers. During the survey period, theft and fraud by
employees (internal fraud) cost U.S. retailers $18.3 billion and Canadian
retailers $1.6 billion.

    Responses from U.S. retailers indicated that 24.6% of internal theft was
believed to take place at the checkout or cash desk, 43.2% on the sales floor,
and 32.2% in the back office, delivery bay or stockroom.

    In Canada the checkout was estimated to account for 44.5% of internal
losses, while 23.7% of losses occurred on the sales floor, and 31.8% in the
back office, delivery bay or stockroom.

    Security Costs

    Global loss prevention costs were $25.6 billion, or 0.35% of retail
sales. Loss prevention spending in North America was $12.7 billion, equivalent
to 29.3% of total shrink. U.S. operating expenses dedicated to loss prevention
(LP) were $8.2 billion, while capital expenses were $3.6 billion; in Canada
the figures were $0.7 billion and $0.2 billion, respectively. U.S. retailer
spending on loss prevention represented 0.45% of retail sales and 0.40% in
Canada. These figures exceed LP spending in most other countries - for
example, European loss prevention spending was 0.34% of retail sales.

    Asia-Pacific retailers spent $1.3 billion on revenue costs (payroll and
services) and a significant percentage of their security budget went to
capital costs (security equipment, IT and other long-term assets) of $877
million. As a percentage of sales, revenue spending was 0.11% of sales, with
capital spending representing 0.07%.

    Merchandise Protection

    By the end of the decade, 69.3% of large retailers in Europe, 68.7% in
North America and 47.3% in Asia-Pacific are expected to source tag
merchandise. This is a dramatic increase from the percentage of retailers in
the survey who currently use source tagging technology: 45.2 percent in North
America, 39.7 percent in Europe and 27.4% in Asia-Pacific (including 40% in
Australia).

    The average number of product lines that were source tagged was 396 in
North America (accounting for 21.3% of retail sales), and 219 in Europe (15.9%
of retail sales).

    The Centre For Retail Research

    The first edition of the Global Retail Theft Barometer has been produced
by Professor Joshua Bamfield, the Director the Centre for Retail Research
(www.retailresearch.org) with the cooperation of Checkpoint Systems, Inc. The
CRR is an independent organization providing research and consultancy for the
retail sector dealing with the changing face of retailing and focusing upon
retail fraud and crime. It has carried out extensive studies dealing with the
costs of crime and the application of electronic and computerized systems to
combat shop theft and fraud in many parts of the world.

    Checkpoint Systems, Inc.

    Checkpoint Systems, Inc. is the leading supplier of retail shrink
management solutions. Checkpoint's global team helps retailers - and their
suppliers - reduce theft, increase inventory visibility and provide consumers
with greater merchandise availability through the company's rapidly evolving
RF technology, expanding shrink management offerings and Check-Net labeling
solutions. Checkpoint has more than one million RF devices installed in stores
today and has secured more than 100 billion products. Scaling cost
efficiently, Checkpoint's solutions provide increased revenues and profits to
a fast-growing community of successful retailers, and a superior experience
for their consumers. Listed on the NYSE (NYSE:  CKP), Checkpoint operates in
every geographic market and employs 3,200 people worldwide. For more
information, visit www.checkpointsystems.com.

    Notes:

    The Centre for Retail Research and Checkpoint Systems will be hosting a
web cast to present the study's key findings and to answer questions on
Monday, November 19, 2007 at 1:00 PM EST. To participate, logon via the
conference call link, which can be found at:

    http://www.webcasts.com/otsp/checkpoint/

    For hard copy B Roll request, please contact Bob Basmadjian at (908)
823-9400 or via e-mail at spectrum_marketing@earthlink.net

    Change Rate Data Research: $1= EUR 0,734305

    MULTIMEDIA AVAILABLE:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5545974




For further information:

For further information: Checkpoint Systems, Inc. Jennifer Henry,
856-251-2150 or Spectrum Marketing & Communications Bob Basmadjian,
908-823-9400 spectrum_marketing@earthlink.net

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