Trending
One of the dictionary definitions of the word "shrink" refers to clinical psychiatrists or psychologists.
However, in the retail sector the word has a vastly different meaning. It is an industry term for loss of inventory, one of the big reasons being rampant theft.
In its Dec. 24-25 edition, just as the holiday shopping season was coming to a close, the Wall Street Journal delved into the scope of the shrink problem with which merchants currently are dealing, compared with what the retail sector had to deal and adjust to just several years earlier.
The bottom line is that the picture painted isn't pretty. Acknowledging that, the article ended with the following paragraph:
"Retailers will ultimately pay for shrink risk in some form or another -- either on the top line if they want to keep stores completely accessible or on the bottom line if they spend heavily on labor and mitigation measures. Finding the right balance will be key to preserving brick-and-mortar businesses."
Yes, finding the right balance to keep alive retail businesses of this region and, thus, keep shoppers' dollars here to benefit the area's economy rather than someone else's.
Each year, to greet Black Friday, the big shopping day immediately following Thanksgiving, the Mirror reminds residents that the same items that some shoppers travel out of the area to purchase actually are available "just down the road" from their residences.
Shoppers are reminded that if they ignore area merchants during the busiest shopping time of the year, those stores might not be operating for the next Black Friday and, perhaps, might be gone long before then.
Additionally, area shoppers are reminded of the commitment to providing good service that is a trademark of the region's retail scene.
But the reality is that there are factors other than diminished loyalty that can deal a serious blow to merchants.
The rampant theft problem on which the Journal focused in the edition in question provided a deeply troubling, eye-opening view of some individuals' shortsightedness and irresponsibility regarding the potentially broad impact of their criminal behavior.
In many instances, shoplifting and other forms of thievery escape detection, but it also is unfortunate to have to note that courts and the lawmakers who are involved in developing sentencing guidelines for offenses against retailing are not as tough as they should be if they are serious about adequately addressing the theft problem.
According to the Journal article, the National Retail Federation estimates that shrink amounted to $94.5 billion -- roughly 1.4% of retail revenue -- in 2021 and most of that shrink was caused by theft.
"Although shrink is a perennial problem in retail," the article said, "it really took off when the pandemic hit. In the five years leading up to 2019, retail shrink grew at a compound annual growth rate of roughly 7%, according to data from the NRF. In 2020, it jumped 47%, and rose a further 4% on top of that huge leap in 2021."
With numbers like that, it is amazing that many more stores have not succumbed to "rampant theft disease."
As one chief executive told CNBC last month, if the retail theft issue is not adequately addressed, prices will be higher and/or stores will have to close.
Merely hoping that shrinkage will go away won't ever be the right approach for tackling the problem.