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Understanding the Distribution of Risk Across Retail Stores

Understanding the Distribution of Risk Across Retail Stores

In this research, academics visited, observed and gathered store level data from retailers. Their objective was to understand what drove variations in shrinkage between stores.

The study considered the extent to which the variation could be attributed to factors outside of the stores control, such as being located in socially and economically deprived neighbourhoods and proximity to mass transit links, compared with factors within the store itself such as the degree of process alignment, quality of store leadership, use of technologies, length of time since last store refit.

The conclusion was that while location plays some role in understanding variations in levels of loss, well performing stores responded to their context and put policies and practices in place to mitigate the impact of potentially challenging externally-driven risk factors.

The report concludes by offering action points retailers could consider to better understand and manage those stores that have above average losses.