Organized retail crime figure retracted by retail lobbyists

The National Retail Federation walked back claims in an April report that organized retail crime accounted for nearly half of all inventory losses in 2021.

This update, made on November 29, comes as stores are sounding the alarm about an increase in retail theft. But has the emphasis on theft been exaggerated?

NRF spokeswoman Mary McGinty said the lobby group supports that organized retail crime is “a serious problem affecting retailers of all sizes and communities” but recognizes the challenges industry and law enforcement face in collecting and analyzing accurate data.

Retail organized crime statistics removed from NRF report

The updated NRF report, produced in partnership with global risk consulting firm K2 Integrity, removes part of a line claiming that nearly half of retailers’ total annual markdown – an industry term for inventory missing – was attributable to “organized retail crime,” a form of retail theft in which many people coordinate to steal products in order to resell them for profit.

McGinty said the error came from a K2 Integrity analyst linking a 2021 NRF investigation that found the theft resulted in shrink worth $94.5 billion with a quote from Ben Dugan, former president of the advocacy group Coalition of Law Enforcement and Retail (CLEAR), during a press conference. 2021 Senate testimony found that organized retail crime accounted for $45 billion in annual losses for retailers.

The problem, according to NRF, is that Dugan was referring to statistics for the overall cost of shrink in 2015, not the dollars lost to organized retail crime in 2021. (In addition to theft, shrink represents also inventory losses due to broken items, administrative errors and other factors.)

McGinty said the trade group updated its report “based on Dugan’s recent statements” that acknowledged he cited a 2016 NRF report that said shrink cost $45.2 billion to the American retail economy in 2015.

CLEAR said it confirms its estimate that organized retail crime leads to $45 billion in store inventory losses each year, or between 40% and 60% of total retail losses. (A September NRF report, by comparison, said internal and external theft accounted for about 65% of shrink in fiscal 2022.)

“This estimate was based on loss data collected directly from retailers and federal and state law enforcement involved in the difficult work of defining and dismantling massive criminal networks targeting our communities,” CLEAR’s statement said .

K2 Integrity declined to comment.

What the data says

Retail crime data is notoriously fuzzy. Most law enforcement agencies tend not to break down organized retail crime in their crime data, and the shoplifting data we do have is often self-reported.

Recent research suggests that while retail theft is on the rise in some markets, it has actually declined in others.

Is shoplifting on the rise? Retail data shows it declined in many cities after the pandemic

The Council on Criminal Justice found that shoplifting trends since 2019 were mixed in 24 cities, with reports up in places like New York and Los Angeles but down in the majority of cities tracked , including Denver, San Francisco and Minneapolis. Additionally, the study indicates that the vast majority of shoplifting is not committed by groups, despite the prevalence of headline-grabbing burglary incidents.

“While theft is likely high, companies are also likely taking the opportunity to distract from margin headwinds in the form of higher promotions and weaker inventory management in recent quarters ” says an October memo led by William Blair analyst Dylan Carden.

This article originally appeared on USA TODAY: 2021 Retail Organized Crime Figure Retracted by NRF