NRF sounds alarm over growing retail problem amid shock announcement

The National Retail Federation, known as the NRF, is the largest retail trade association in the world. Its mission is to help and support retail growth through education and advocacy.

According to the NRF, retail is the nation’s largest private sector employer, contributing $3.9 trillion to annual GDP.

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This sector also provides one in four jobs in the US, employing approximately 52 million Americans.

Since the Loss Prevention Research Council was established in 2000, the NRF has published an inventory loss study that provides statistics on areas of concern, including the risks, threats and vulnerabilities that retailers should focus on to prevent subsequent losses.

To make this study as accurate as possible, NRF gathers information from 177 retail brands spanning 28 different retail sectors, representing more than 97,000 US retail locations.

For nearly three decades, the council has conducted more than 300 loss prevention research projects to help retailers.

However, a sudden and unexpected announcement by the NRF may forever change the way retailers strategize against retail loss.

Target retail stores in New York City have installed locked boxes for everyday merchandise because of the thefts.

UCG/Getty Images

Retail inventory losses are higher than ever and continue to be a concern for the industry

Retail inventory losses continue to increase annually and have skyrocketed in recent years, negatively impacting the retail industry.

The amount of retail inventory losses in a given period is calculated by a measurement called shrinkage or shrinkage, which is categorized into different retail means.

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According to the NRF’s latest 2023 National Retail Security Study, the average drop rate in fiscal 2022 increased to 1.6 percent, compared to 1.4 percent in 2021.

The total drop for 2022 amounted to $112.1 billion in losses that year alone, a 19.4% increase from the $93.9 billion reported in 2021.

Internal and external theft accounted for the most losses at around 65%, hugely impacting retailers’ margins and profitability.

However, violence and threats of violence during shoplifting surpassed all other factors contributing to stock loss as an area of ​​concern, with 88% of retailers reporting that shoplifting encounters are more violent than the previous year.

Retailers specifically tracking the number of violent shoplifting incidents reported an average increase of 35%.

Because of rising violent theft, some retailers have invested in more security-related measures, such as technology and partnering with law enforcement.

Other retailers opted for different alternatives, with 45% reducing opening hours at some locations, 30% reducing or alternating product availability, and 28% ultimately choosing to close stores due to the alarming increase in shoplifting.

The NRF makes a major announcement that shocks retailers

On Monday, the NRF announced that it will not release its annual shrink report this year, as first reported by Retail Dive.

As stated in an NRF comment to TheStreet, the federation said it wants to provide the most accurate and actionable information possible; therefore, it will re-evaluate its study to better reflect the current needs of the retail industry.

“Over the past few years, as the nature of retail losses has evolved, it has become clear that a broad study of retail decline is no longer sufficient to capture the key challenges and needs of the industry,” said a representative of NRF at The Street. .

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While it’s a shock announcement, the NRF has revealed it will launch a new report later this year examining the retail theft and violence landscape, which it sees as key challenges for the industry.

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