What used to be called shoplifting is now known as “shrinking.” That is because shoplifting implies that a single individual takes merchandise from a story. The term “shrink” includes acts by employees and organized groups, which includes organized crime. According to CNBC, big box home improvement retailer Lowe’s lost $997 million in fiscal 2022, compared to $796 million the year before. CNBC used public company filings to come up with its numbers.
Some retailers may lie about shrink numbers as a ruse to cover poor inventory management. It seems unlikely a public company would risk misleading investors, but it is not as if companies have not lied about other issues before.
It seems odd that companies like Lowe’s, which have access to sophisticated security experts and law enforcement that could include the FBI, may suffer from a problem approaching $1 billion at a single company. However, the Lowe’s figure is only 1% of total sales.
If Lowe’s has access to federal crime experts, it raises the question of how these experts could do such a poor job. However, theft could start between when inventory leaves a supplier and when it is in stores. That could include hundreds of miles of transit. Several individuals and organizations touch inventory along the way. Skimming a relatively small portion of this inventory may take a few minutes.
What is not in question is that if retailers are accurate in their assessments, security experts have done a progressively poorer job solving the problem. That is shocking, but it means the trouble could grow.
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