About the Report• „The Global Retail Theft Barometer 2010“ – the

largest global study on retail losses. Study objectives - provide snapshot of global shrink trends, compare year-over-year results, evaluate and understand differences in Europe vs. global results, benchmark across regions, vertical markets

• Conducted by Centre for Retail Research. Authored by Professor Joshua Bamfield, expert on retail theft

• Underwritten by a grant from Checkpoint Systems

• Timeframe of findings: July 2009 – June 2010

Methodology• This study is the biggest in 10 years: 1103 retailers from 42 countries• Data from 5 regions:

• North America• Latin America• Europe• Middle East/Africa• Asia-Pacific

• Russian retailers added for first time

GLOBAL

ShrinkageRegion

Shrinkage (as % of sales)

Percentage Change 2009-2010

North America 1,49% -7,0%Latin America 1,60% -4,1%Middle East/Africa 1,62% -5,9%Asia - Pacific 1,16% -6,5%Europe 1,29% -4,4%Global 1,36% -5,6%

€76,64 milliard

Percentage of Retailers Experiencing Increases in Employee Theft and Shoplifting

31,1%

30,2%

23,1%

35,6%

30,1%

36,1%

17,7%

7,8%

26,8%

24,4%

21,8%

17,7%

Grand Totals

Europe

Asia-Pacific

Middle East/Africa

Latin America

North America

Employee theftShoplifting

EUROPE

Countries

Western Europe Eastern and Central Europe

IrelandAustriaBelgiumDenmarkGreeceSpainItaly

United KingdomLuxemburg

The NetherlandsFinlandPortugalFranceNorwaySweden

SwitzerlandGermany

Baltic StatesRussia

Czech RepublicPoland SlovakiaTurkey

Hungary

Europe and Baltic States

Region Number of respondents Total store numbers Sales of respondents

(€ milliard)

Europe 571 68737 303,29

Baltic States 13 792 0,79

2000 - 2010 Retail Shrinkage

1,42%

1,35%

1,37%

1,45%

1,24%1,26% 1,27%

1,33%

1,27%

1,23%

1,2

1,25

1,3

1,35

1,4

1,45

1,5

2001 2002 2003 2004 2004 2005 2007 2008 2009 2010

Shrinkage

1,61

%

1,52

%

1,40

%

1,40

%

1,38

%

1,38

%

1,37

%

1,36

%

1,35

5

1,34

%

1,32

%

1,30

%

1,30

%

1,29

%

1,29

%

1,28

%

1,28

5

1,27

%

1,26

%

1,24

%

1,22

%

1,21

%

1,12

%

1%0,97

%

0,9

1

1,1

1,2

1,3

1,4

1,5

1,6

1,7

Aus

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Ger

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Italy

Uni

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Kin

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Eur

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Rus

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Gre

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Spa

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Sw

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Pol

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Slo

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Hun

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Bel

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EUROPE Total Shrinkage (M EUR)

Shrinkage 2010

Shrinkage 2009 Change

Austria 0,39 0.97% 0,99% -2,0%

Baltic States 0,177 1,40% 1,44% -2,8%

Belgium/Luxemburg 0,737 1,38% 1,41% -2,1%

Czech Republic 0,312 1,40% 1,47% -4,8%

Denmark 0,324 1,21% 1,25% -3,2%

Finland 0,354 1,28% 1,31% -2,3%

France 4,130 1,36% 1,42% -4,2%

Germany 4,367 1,12% 1,17% -4,3%

Greece 0,437 1,30% 1,39% -6,5%

Hungary 0,298 1,38% 1,45% -4,8%

Ireland 0,380 1,32% 1,38% -4,3%

Italy 2,806 1,28% 1,36% -5,9%

The Netherlands 1,015 1,22% 1,26% -3,2%

Norway 0,377 1,26% 1,31% -3,8%

Poland 1,032 1,35% 1,42% -4,9%

Portugal 0,297 1,24% 1,26% -1,6%

Russia 2,372 1,61% 1,68% -4,2%

Slovakia 0,12 1,37% 1,45% -5,5%

Spain 2,348 1,30% 1,36% -4,4%

Sweden 0,562 1,34% 1,39% -3,6%

Switzerland 0,535 1,00% 1,03% -2,9%

Turkey 1,207 1,52% 1,67% -9,0%

United Kingdom 4,722 1,29% 1,37% -5,8%

€29,30 milliard

Shrinkage

Europe: Sources of Retail Shrinkage

59%

23%

5%

13%

Employee theftSuppliers/vendorsShopliftersInternal error

• The biggest source of retail shrinkage are shoplifters

Baltic States: Sources of Retail Shrinkage

• The biggest source of retail shrinkage are shoplifters

14%

9%

34%

43%

Employee theftSuppliers/vendorsShopliftersInternal error

Apprehended Thieves• Global 6,2 million thieves apprehended. Average amount stolen

per incident:• Shoplifters - €161 • Employees - €1586

• Europe 3,4 million thieves apprehended. Average amount stolen

per incident• Shoplifters - €114• Employees - €1760

• Most stolen goods are FMG and small products • Electronics• Cosmetics• Alcohol/food• Tobacco products• Clothing• Jewellery

• More at-risk items being protected• 28% of “most-stolen” items not protected by European

retailers

Most-vulnerable Merchandise

Protection version Most stolen- stolen lines protection

EAS hard tags 28,3%

EAS soft or paper tags 13,6%

EAS source tagging 8,3%

3-alarm accessories 4,0%

Displayed in locked cabinets or shelves 7,3%

Dummy cartons or ticket systems 4,3%

Chains, cables, loop alarms 5,1%

Safers, locked boxes, product alarms 12,1%

Other protection devise 5,0%

Loss Prevention and Security Costs

37,3%

30%

8,6%

4%20,1%

Direct employeesContract employeesSecurity equipmentArmoured car collectionOther

• Loss prevention price in Europe is €8,4 milliard or 0,32% of sales

Loss Prevention and Security Costs2009 -2010

• Security investment grew by 18,3%

7,1

8,4

6,7

6,9

7,1

7,3

7,5

7,7

7,9

8,1

8,3

8,5

2009 2010

* € milliard

Security Tendencies

• It is a huge demand for analytics and digital technologies in loss prevention and sales control

• EAS remains the most-used method of protection• POS and IP video integrated solution • More focus on Keepers• Less use of locked cabinets/shelves

New loss prevention policiesEurope Global

Implemented Planned Implemented Planned

More Employee training to spot and theft 92% 87% 91% 75%

Increased spending on crime prevention hardware and software 31% 14% 32% 18%

Increase EAS reusable accessories 25% 13% 22% 17%

Hiring more in-store LP employees 23% 15% 24% 15%

New CCTV video surveillance 22% 18% 20% 20%

Pre-hiring screening for employees 22% 23% 27% 23%

Increased spending on LP consumables 21% 21% 24% 22%

Plans

www.CheckpointSystems.com