Retailers, Police Report Spike in Shoplifting
As the economy cools, more workers and consumers take the five-finger discount.
June 21, 2008 — -- One morning last month, the manager of a Stop & Shop in Methuen, Mass., noticed a man, along with his young daughter, leave the store without paying for several bags of shrimp. When police arrived, they found something else on him, too: 20 cans of baby formula.
Call it a sign of the times. Steadily and alarmingly, shoplifting seems to be rising at many retail chains, and experts are pointing at a prime cause: the sputtering economy.
"Wages aren't keeping up with inflation, especially the price of food and energy," says Diane Swonk, chief economist at Mesirow Financial. "It just leaves less money for everything else, and that breeds a lot of temptation."
Retail and law enforcement experts agree that they've seen an increase in store theft during the current slowdown — and not only from customers.
"It's clear that both employee theft and shoplifting are up," says Richard Hollinger, professor of criminology at the University of Florida who compiles the annual National Retail Security Survey. "The most recent rise is being driven by the economy. A lot of people are on the financial edge."
When 116 retailers were surveyed recently about shoplifting, 74% said they believed that shoplifting incidents last year had risen from 2006, according to the National Retail Federation.
And when a smaller group of retailers were asked about shoplifting so far this year, nearly all said it has continued to rise, says Joe LaRocca, vice president of loss prevention at the National Retail Federation. They also said they felt the economy had been a contributing factor.
All told, retail theft is estimated to cost about $40.5 billion a year. And the rest of us, already squeezed by higher gas and food prices, end up paying for it: Stores pass on much of their losses to customers in the form of higher prices.
"Retailers can't afford to just eat that loss," Hollinger says. "Their margins aren't large enough. So this hits right on the bottom line, and they're trying to plug up all of these leaks, because the economy is so tight."
Among the reasons the sluggish economy is thought to be contributing to rising shoplifting by customers and store employees:
