The National Retail Federation, commonly known as NRF, is the world's largest retail trade association. 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 U.S., employing around 52 million Americans.
Since the Loss Prevention Research Council was established in 2000, the NRF has published a study on inventory loss that provides statistics on areas of concern, including risks, threats, and vulnerabilities that retailers should focus on to prevent further losses.
To make this study as accurate as possible, the NRF gathers insights from 177 retail brands that cover 28 different retail sectors, representing over 97,000 retail locations in the U.S.
For nearly three decades, the council has conducted over 300 loss-prevention research projects to aid retailers.
However, a sudden, unexpected announcement by the NRF may forever change how retailers strategize against retail loss.
Retail inventory losses are higher than ever and continue to be a concern for the industry
Retail inventory losses continue to increase yearly and have skyrocketed in recent years, impacting the retail industry negatively.
The amount of retail inventory losses during a certain period is calculated by a measurement called shrink or shrinkage, which is categorized across various retail means.
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According to the NRF's most recent National Retail Security Survey for 2023, the average shrink rate in fiscal 2022 increased to 1.6% compared to 1.4% in 2021.
The total shrinkage for 2022 amounted to $112.1 billion in losses in that year alone, which is a 19.4% increase from the $93.9 billion reported in 2021.
Internal and external theft accounted for most losses, about 65%, hugely impacting retailers' margins and profitability.
However, violence and threats of violence during theft have surpassed all other contributors to inventory loss as an area of concern, with 88% of retailers reporting that shoplifting encounters are more violent than the year prior.
Retailers who specifically track the amount of violent shoplifting incidents reported an average 35% increase.
Due to increased violent theft, some retailers have invested in more security-related measures, such as technology and partnering with law enforcement.
Other retailers have opted for different alternatives, with 45% reducing operating hours in some locations, 30% reducing or alternating product availability, and 28% ultimately choosing to close shops because of the alarming spike in violent theft.
NRF makes a major announcement that shocks retailers
On Monday, The NRF announced it would not publish its yearly shrink report this year, as first reported by Retail Dive.
As stated in a comment by the NRF 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 retail industry's current needs.
"Over the last several years, as the nature of retail loss has evolved, it has become clear that a broad study about retail shrink is no longer sufficient for capturing the key challenges and needs of the industry," said an NRF representative to The Street.
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Although a shocking announcement, the NRF disclosed that it will be releasing a new report later this year that examines the landscape of retail theft and violence, which it considers to be key challenges for the industry.
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