1.78% OF TOTAL SALES LOST TO SHRINK IN YEAR: SURVEY

DENISE ZIMMERMAN

GAINESVILLE, Fla. -- Supermarket retailers surrendered an average 1.78% of their total sales to shoplifters, dishonest employees and other sources of shrink last year, according to a new survey released today.

In the 1996 Retail Theft Security Survey, which examined 1995 data from 289 companies in 26 classes of trade, supermarkets represented the single largest group of respondents -- 33 companies. Discount stores were also polled and reported a higher rate of shrink than supermarkets, 2.14% of sales on average.

Overall, all classes of trade reported shrink at 1.87% of total sales, up slightly from the prior year's 1.83%. The survey was conducted through the Department of Sociology at the University of Florida here.

Retailers said employee theft is the single largest source of shrink, 38.4% of total losses, followed closely by shoplifting, 35.8%; administrative error, 19.4%, and vendor fraud, 6.4%.

The 1995 results on origin of losses do not differ greatly from the prior year's although shoplifting and vendor fraud increased slightly this year while both employee theft and administrative error dropped back a few tenths of a percentage point.

An average of 31.1 employee theft apprehensions were made for every $100 million in sales, according to respondents in all retail categories. Retailers made 270.2 shoplifting apprehensions for every $100 million in sales, the report said.

Supermarket retailers were among the hardest hit by losses due to bad checks. Overall, companies said they had 1,658 bad checks for every $100 million in sales.

Food retailers were also singled out when losses were viewed by tracking empty packages left behind on store shelves; retailers in all classes of trade found on average 896.6 empty packages for every $100 million in sales.

Although vendor fraud increased only slightly from 6% in the prior year to the current report's 6.4% of total sales, supermarkets remain among those at greatest risk. Retailers overall reported an average of 19.5 cases of vendor theft per $100 million in sales.

Dean Dabney, graduate research associate at the University of Florida, noted that retailers calculate their shrink using different methods -- true cost, full retail value of inventory or a combination of both.

Among food retailers, 17 of the 33 participating in the survey used a hybrid shrink formula based on both retail value and true cost of the inventory; 11 companies used the full retail value, and four companies calculated shrink based on the true cost of the merchandise. One did not specify how shrink was figured.

The survey's sample of food retailers had $858 million in annual sales and operated 58 stores on average. Research was conducted by the University of Florida, with consulting advice from Loss Prevention Specialists, Winter Park, Fla., and funding from Sensormatic, Boca Raton, Fla.