1. November 2007

2. THE WORLDWIDE SHRINKAGE SURVEY Worldwide Shrink Survey  The Global Retail Theft Barometer 2008 is the most extensive survey of shrink ever undertaken  It is the unique worldwide survey  The objective is to give retailers comparative information about the shrink situation at a global level  The survey was carried out by the Centre for Retail Research, led by Professor Joshua Bamfield

3. THE WORLDWIDE SHRINKAGE SURVEY  A survey that responds adequately to the global nature of the retail business today  An opportunity to benchmark across different regions, countries and sectors  A chance to identify and understand trends in specific regions of the world Why Global? Worldwide Shrink Survey

4. THE WORLDWIDE SHRINKAGE SURVEY Worldwide Shrink Survey  3.900 questionnaires were sent out to the Loss Prevention or Security Vice President or Chief Security Officer of retail corporations in 36 countries around the world including for the first time South Africa, Argentina, Brazil, Mexico and Malaysia  920 retail companies running 115.612 retail outlets with combined sales of 554.334 M€ responded the questionnaire  Satisfactory response rate of 23,6% 36 countries surveyed

5. THE WORLDWIDE SHRINKAGE SURVEY Worldwide Shrink Survey Global Costs of Crime including Costs of Loss Prevention (in million €) Total global shrinkage + loss prevention 76.749 M€ (73.616 M€ in 2007)

6. THE WORLDWIDE SHRINKAGE SURVEY Shrinkage Rates  20 of the 36 countries increased shrinkage  14 countries reduced shrinkage  In 2 countries the average shrinkage rate did not change  Globally, this year shrinkage fell of -1,5% on average  Countries with the highest shrinkage rates: India, Mexico and Thailand  Japan, Austria and Switzerland had the lowest rates

7. THE WORLDWIDE SHRINKAGE SURVEY Average Shrinkage Rates

8. THE WORLDWIDE SHRINKAGE SURVEY Sources of Global Retail Shrinkage ‘08

9. THE WORLDWIDE SHRINKAGE SURVEY Apprehended Thieves Number of Thieves Apprehended by Retailers 2008 CUSTOMER THIEVESEMPLOYEE THIEVES Number of Thieves Average amount stolen per incident Number of Thieves Average amount stolen per incident Combined Totals North America 1.447.046509 € 689.546947 € 2.136.592 Percentages 67,7%32,3%100% Latin America 145.154 49 € 15.655280 € 160.809 Percentages 90,3%9,7%100% Africa 10.93724 €1.183458 €12.120 Percentages 90,2%9,8%100% Asia-Pacific 120.68146 €18.693269 €139.374 Percentages 86,6%13,4%100% Europe 2.758.70074 €89.3812142 €2.848.081 Percentages 96,9%3,1%100% Global totals4.482.518223 €814.4581.254 €5.296.976 Global Percentages84,6%15,4%100% The amount recovered by apprehending thieves was 2.042 M€

10. THE WORLDWIDE SHRINKAGE SURVEY Most-Stolen Merchandise by Vertical Market

11. THE WORLDWIDE SHRINKAGE SURVEY Consumers The global cost of retail crime (stock loss from crime plus the costs of loss prevention) represented an annual ‘tax’ on honest consumers globally of: 157 € per household or 48,50 € per person THE WORLDWIDE SHRINKAGE SURVEY

12. Organized Retail Crime  Customer theft, including shoplifting and organized retail crime (ORC) caused the greatest shrinkage loss in most countries, a total of 29.283 M€ (41,2% of total shrinkage)  The increase in the significance of customer theft in North America is thought to be caused by organized retail crime, a growing problem which may spread globally  Very popular products like the early Harry Potter books, Nintendo games, recent DVD films etc. reach a loss of up to 8%  Nearly one third (30,3%) of the most-stolen merchandise was not protected  EAS hard tags were used on 16,9% of items, soft tags on 12% and 9,4% of the lines were protected by EAS source tagging The Shadow Threat

13. THE WORLDWIDE SHRINKAGE SURVEY Results for Europe

14. THE WORLDWIDE SHRINKAGE SURVEY Europe  502 European retailers responded, running 36.199 stores, representing a combined total of 283.098 M€ in retail sales  In the12-month-period leading to June 2008, the average shrink rate rose by 0,8% from 1,26% to 1,27%)  Shrinkage cost retailers 27.438 M€, an increase of 279 M€ compared to last year

15. THE WORLDWIDE SHRINKAGE SURVEY Europe  In the survey Europe is split into - Western Europe (Austria, Belgium, Luxemburg, Denmark, Finland, France, Germany, Greece, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom) - Central Europe (Czech Republic, Hungary, Poland, Slovakia, Baltic States)

16. THE WORLDWIDE SHRINKAGE SURVEY Europe  Retail theft (as % of sales) in Europe was 1,27% (vs. 1,34% global)  In Western Europe the average was 1,26%  The average rate in Central Europe was 1,36% THE WORLDWIDE SHRINKAGE SURVEY

17. European Retail Shrinkage 2008 EUROPE Total Shrinkage 2008 (Million €) Shrinkage 2008 (as % of sales) Shrinkage 2007 (as % of sales) Percentage change 2007-08 Austria 4301.01%0.94%7.4% Belgium/Luxembourg 7701.36%1.33%2.2% Denmark 3411.20% 0.0% Finland 3811.30%1.32%-1.5% France 4.4141.37%1.34%2.2% Germany 4.6741.13%1.10%2.7% Greece 4711.32%1.36%-3.0% Ireland 4151.36%1.33%2.2% Italy 2.9771.28%1.23%4.1% The Netherlands 1.0591.20%1.24%-3.2% Norway 4061.28%1.26%1.6% Portugal 3201.26%1.31%-3.8% Spain 2.5101.31%1.28%2.3% Sweden 5601.35%1.32%2.3% Switzerland 5731.01%0.96%5.2% United Kingdom 5.0491.30%1.34%-3.0% Western Europe 25.3881.26%1.25%0.8% Czech Republic 3261.38%1.41%-2.1% Hungary 3171.38%1.36%1.5% Poland 1.1031.36%1.34%1.5% Slovakia 1221.32%1.30%1.5% Baltic States (Latvia, Estonia, Lithuania) 1821.35%1.42%-4.9% Central Europe 2.0501.36% 0.0% Western and Central Europe 27.4381.27%1.26%0.8% Global 71.1841.34%1.36%-1.5%

18. THE WORLDWIDE SHRINKAGE SURVEY European Retail Shrinkage 2000-08 Shrinkage Rate (% of sales)

19. THE WORLDWIDE SHRINKAGE SURVEY Sources of Retail Shrinkage - Europe

20. THE WORLDWIDE SHRINKAGE SURVEY Sources of Theft – Europe  Customer thieves and organized gangs were the largest single cause of retail shrinkage in Europe. Customer thieves thought to be responsible for 46,8% (12.834 M€)  The next largest was dishonest employees, estimated to cause 30,7% of retail losses (8.425 M€)  The rise in the share of shrinkage caused by employee theft was 2,1% compared to 2007  The average value stolen or admitted by employee thieves in Europe (2.142 €) was almost triple the average stolen by customer thieves (73,50 €), emphasising the need for preventing employee theft as well

21. THE WORLDWIDE SHRINKAGE SURVEY Loss Prevention Costs – Europe  European LP spending as a percentage of sales is 0,34% (6.899 M€)  Global LP spending as a percentage of sales is 0,33% (17.351 M€)

22. THE WORLDWIDE SHRINKAGE SURVEY Protection Methods – Europe  The 50 most vulnerable product lines in Europe are protected by:  Electronic Article Surveillance: 36% (of which 7,9% are source tagged)  Locked cabinets and shelves: 9,9%  Keepers/safers and locked boxes: 7,2%  Chains, cables and loop alarms: 6,1%  Dummy cartons or ticket systems: 4,5%  Other protection device: 1,8%  More than one third (34,5%) of lines were not protected (global average = 30,3%)  68,7% of European retailers have store audit programs in place, to ensure that agreed corporate policy for loss prevention and security is carried out in stores

23. THE WORLDWIDE SHRINKAGE SURVEY Shrink by Vertical Markets – Europe EUROPE 20082007Change vehicle parts/hardware/DIY/building materials retail1.75%1.71%2.3% apparel/clothing and fashion/ accessories1.70%1.69%-0.6% books/newspapers/stationery1.66%1.69%-1.8% convenience stores/ natural & speciality foods1.66%1.64%1.2% cosmetics/ perfume/ health & beauty/pharmacy1.52%1.53%-0.6% department store or large general store1.46%1.43%2.1% video/ music/ games software1.38%1.36%1.5% supermarket/ hypermarkets/ large grocery1.15%1.21%-5.0% office products1.10%1.08%1.9% jewellery/ watches0.92%0.96%-4.1% electrical goods/ computer centre/ electronics store0.85%0.82%3.6% liquor, wine beer/off-licence0.85%0.80%6.3% furniture/ textiles/ floor & window coverings/0.81%0.83%-2.4% toys and games/ hobby and craft0.76%0.75%1.3% discount/ variety retail/ warehouse clubs0.74%0.76%2.6% footwear/ shoes/ sports goods & sporting goods0.65%0.67%-3.0% Totals1.27%1.26%0.8%

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