NRF PROTECT 2018 NRSS Study

1. 6/13/2018
1
2018 National Retail
Security Survey
Dr. Richard Hollinger, University of Florida
Dan Faketty, Vice President Asset Protection, Southeastern Grocers
Survey among 63 loss prevention and asset protection professionals, representing multiple brands
You will learn:
1) Shrinkage % of retail sales
2) Sources of inventory shrinkage
3) LP budgets as % of sales

2. 6/13/2018
2
9.1%
10.9%
12.7%
9.1%
16.4%
20.0%
21.8%
Overall Inventory Shrink as a Percentage of Sales
3% and higher
Between 2% and 2.99%
Between 1.5% and 1.99%
Between 1.25% and 1.49%
Between 1% and 1.24%
Between .50% and .99%
.49% and below
Average=1.33%
Median=1.06%
2017
3% and higher 9.0%
Between 2% and 2.99% 14.1%
Between 1.5% and 1.99% 17.9%
Between 1.25% and 1.49% 9.0%
Between 1 and 1.24% 7.7%
Between .50% and .99% 24.4%
.49% and below 17.9%
Average 1.44%
Median 1.20%
2018
35.7%
33.2%
18.8%
5.8%
6.6%
% Shoplifting/external
(including ORC)
% Employee theft/internal
% Administrative and
paperwork error
% Vendor fraud or error
% Unknown loss
2017 2016 2015
% Shoplifting/external% Shoplifting/external% Shoplifting/external% Shoplifting/external
(including ORC)(including ORC)(including ORC)(including ORC)
36.5% 39.3% 38.0%
% Employee theft/internal% Employee theft/internal% Employee theft/internal% Employee theft/internal 30.0% 35.8% 34.5%
% Administrative and% Administrative and% Administrative and% Administrative and
paperwork errorpaperwork errorpaperwork errorpaperwork error
21.3% 16.8% 16.5%
% Vendor fraud or error% Vendor fraud or error% Vendor fraud or error% Vendor fraud or error 5.4% 4.8% 6.8%
% Unknown loss% Unknown loss% Unknown loss% Unknown loss 6.8% 7.2% 6.1%
Source of Inventory Shrinkage
(Average)
2018

3. 6/13/2018
3
0.34%
0.27%
0.12%
0.74%
0.12%
0.03% 0.03%
0.35%
0
0.02
0.04
0.06
0.00%
0.50%
1.00%
1.50%
2.00%
% Payroll expenses % Capital expenses % Other non capital
expenses
% Overall
Security and Loss Prevention Budget as a Percentage of Sales (2018)
Average Median
Averages 2017 2016 2015
% Payroll expenses% Payroll expenses% Payroll expenses% Payroll expenses 0.13% 0.18% 0.22%
% Capital expenses% Capital expenses% Capital expenses% Capital expenses 0.07% 0.07% 0.14%
% Other non capital% Other non capital% Other non capital% Other non capital
expensesexpensesexpensesexpenses
0.11% 0.06% 0.13%
% Overall% Overall% Overall% Overall 0.40% 0.42% 0.42%
23.7%
9.4%
6.7%
1.8%
20.0%
7.5%
0.5% 0.0%
0.0%
10.0%
20.0%
30.0%
Women Latino African-American Asian-Pacific
LP Management (or Higher-Ranked Roles) – Representation by
Demographic Groups (2018)
Average Median
The average LP
team has 43.6
employees per $1
billion in sales.
Averages 2017 2016
WomenWomenWomenWomen 25.9% 24.5%
LatinoLatinoLatinoLatino 9.0% 9.4%
AfricanAfricanAfricanAfrican----AmericanAmericanAmericanAmerican 7.6% 6.7%
AsianAsianAsianAsian----PacificPacificPacificPacific 2.6% 2.1%

4. 6/13/2018
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Response 2018 2017 2016 2015
Criminal conviction checks 84.1% 85.1% 89.2% 89.0%
Multiple interviews 81.0% 91.0% 89.0% 86.3%
Verify past employment history 60.3% 73.1% 61.5% 72.6%
Personal reference checks 54.0% 58.2% 58.5% 61.6%
Drug screening (laboratory) 36.5% 40.3% 55.4% 60.3%
Education verification 33.3% 43.3% 35.4% 43.8%
Driving history 31.7% 28.4% 41.5% 49.3%
Credit checks 27.0% 26.9% 33.8% 28.8%
Computerassisted interview 11.1% 20.9% 16.9% 28.8%
Pre-employment honesty testing 11.1% 14.9% 15.4% 16.4%
Mutual protection association 7.9% 9.0% 12.3% 12.3%
Handwriting analysis 3.2% 3.0% 0.0% 0.0%
Worker’s compensation claims 3.2% 1.5% 4.6% 1.4%
Top Employee Integrity Screening Options Used by Retailers
Response 2018 2017 2016 2015
Anonymous telephone “hotline” 81.0% 90.5% 93.8%93.8%93.8%93.8% 94.6%94.6%94.6%94.6%
Bulletin board notices and posters 81.0% 81.0% 92.3%92.3%92.3%92.3% 87.8%87.8%87.8%87.8%
Code of conduct 79.4% 88.9% 90.8%90.8%90.8%90.8% 90.5%90.5%90.5%90.5%
Discussion during new hire orientation 74.6% 81.0% 83.1%83.1%83.1%83.1% 90.5%90.5%90.5%90.5%
Training videos 68.3% 58.7% 66.2%66.2%66.2%66.2% 71.6%71.6%71.6%71.6%
Periodic programs and lectures 55.6% 47.6% 58.5%58.5%58.5%58.5% 51.4%51.4%51.4%51.4%
Active Shooter training program 54.0% 63.5% 61.5%61.5%61.5%61.5% 66.2%66.2%66.2%66.2%
Newsletters 47.6% 41.3% 72.3%72.3%72.3%72.3% 54.1%54.1%54.1%54.1%
Internet, webbased communications 44.4% 50.8% 55.4%55.4%55.4%55.4% 55.4%55.4%55.4%55.4%
Anonymous online / email notification system 42.9% 52.4% 60.0%60.0%60.0%60.0% 55.4%55.4%55.4%55.4%
Training audio/announcements 36.5% 20.6% 27.7%27.7%27.7%27.7% 27.0%27.0%27.0%27.0%
Honesty incentives (e.g. cash & gifts) 33.3% 36.5% 56.9%56.9%56.9%56.9% 54.1%54.1%54.1%54.1%
In-store, employee LP committees 28.6% 28.6% 41.5%41.5%41.5%41.5% 37.8%37.8%37.8%37.8%
Internet interactive or CDROM training 27.0% 34.9% 44.6%44.6%44.6%44.6% 44.6%44.6%44.6%44.6%
Employee surveys about LP issues 19.1% 17.5% 26.2%26.2%26.2%26.2% 28.4%28.4%28.4%28.4%
Paycheck stuffers 11.1% 11.1% 6.2%6.2%6.2%6.2% 8.1%8.1%8.1%8.1%
Top Loss Prevention Awareness Programs Used by Retailers

5. 6/13/2018
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87.3%
76.2%
74.6%
74.6%
57.1%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Burglar alarms
Remote IP CCTV monitoring
Armored car deposit pickups
Digital video recorders
POS data mining
Top Loss Prevention Strategies in Use (2018)
Response 2018 2017 % Point Difference
Simulated, visible CCTV 41.3% 14.3% +27.0
Cables, locks and chains 34.9% 57.1% -22.2
Acousto-magnetic, electronic security
tags
22.2% 44.4% -22.2
POS data mining 57.1% 76.2% -19.1
Live customer visible CCTV 54.0% 73.0% -19.0
Retail Loss Prevention Strategies with The Greatest Change in Use Compared to 2017

6. 6/13/2018
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506.1
397.8
104.4
125.1
94.5 100.0
24.0
1.5
0
200
400
600
# of Apprehensions # of Terminations # of Prosecutions # of Civil Demands
Apprehensions and Actions Taken Against Dishonest Employees (2018)
Average Median
22.0% 15.3%
3.4%
13.6%
10.2%
16.9%
18.6%
3.4%
Average Dollar Loss per Dishonest Employee Case (2018)
Up to $249
Between $250 and $399
Between $400 and $499
Between $500 and $749
Between $750 and $999
Between $1,000 and $1,999
Between $2,000 and $4,999
$5,000 and above
Average=$1,203.16
Average
2017201720172017 $1,922.80
2016201620162016 $1,233.77
2015201520152015 $1,546.83

7. 6/13/2018
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1105.2
727.9
543.9
4.0 10.0 0.0
0
1000
2000
3000
4000
# of Apprehensions # of Prosecutions # of Civil Demands
Actions Taken in Shoplifting Incidents (2018)
Average Median
11.8%
13.7%
15.7%
5.9%
5.9%
15.7%
15.7%
9.8%
7.8%
Average Dollar Loss per Shoplifting Incident (2018)
$1 to $49
$50 to $99
$100 to $124
$125 to $149
$150 to $199
$200 to $299
$300 to $499
$500 to $999
$1000 and over
Average=$559
Median=$150
Average
2017201720172017 $798.48
2016201620162016 $376.80
2015201520152015 $317.84

8. 6/13/2018
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1.9%
0.0% 1.9%
5.8%
9.6%
11.5%
34.6%
Average Dollar Loss per Robbery (2018)
$0 to $199
$200 to $499
$500 to $999
$1000 to $1999
$2000 to $4999
$5000 to $9999
$10000+
Average=$4,237.02
Average
2017201720172017 $5,309.72
2016201620162016 $8,170.17
2015201520152015 $2,465.00
7.9%
27.0%
31.8%
15.9%
3.2%
14.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Weekly Monthly Quarterly Semi-Annually Annually Never
How Often LP Professionals Meet With Their
IT/Cybersecurity Teams (2018)

9. 6/13/2018
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To download a copy of this report:
1) Create a MyNRF account on NRF.com
2) Once logged in, use the search tool and input “NRSS”
3) You can also visit this URL: nrf.com/resources/retail-
library/national-retail-security-survey-2018