Study Finds Supply Chain Drives 75% of Retail Loss
A joint IHL Group and Sensormatic Solutions study shows external theft accounts for just a quarter of total retail losses worldwide.
Updated on Nov. 2, 2026 in Property Crime
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IHL Group and Sensormatic Solutions released the Beyond Shrink: 2026 Global Total Retail Loss Study, which found external theft accounts for 25% of retail loss while 75% originates in other business areas. The study examined store theft, supply chain, returns, e-commerce fulfillment and administration.
Why it matters
The findings suggest retailers focused narrowly on shoplifting may be overlooking the larger share of losses stemming from internal processes and supply chain gaps. Investments in digital data collection and analytics have changed how retailers understand where losses occur.
The study reports that 68% of retailers saw increased return fraud and 69% reported increased shoplifting, with 71% of U.S. retailers and 67% of Spanish retailers reporting rising organized retail crime. Australia recorded the highest reported growth rate in organized retail crime, though specific comparison baselines were not provided.
The players
IHL Group
IHL Group is a research and advisory firm focused on the retail and technology sectors.
Sensormatic Solutions
Sensormatic Solutions is a retail loss prevention and shrink management technology provider.
The details
The study ranks fraud prevention fifth among seven loss-related performance measures for retailers. Supplier fraud, warehouse shrink and goods-receiving loss together account for 33% of total losses, while external theft and organized retail crime account for 26% of losses among retailers with revenue of $1 billion or more.
Timeline
2026: Beyond Shrink: 2026 Global Total Retail Loss Study released
Market Landscape
The study extends IHL Group's recurring retail loss research by widening its focus from store theft to supply chain, returns and e-commerce losses. Its finding that external theft is only a quarter of losses reframes a shrink conversation that has long centered on shoplifting.
For shoppers, retailer responses to these losses can affect checkout policies, return rules and staffing levels in stores. Retailers reporting higher return fraud may tighten refund requirements, which affects how easily consumers can return purchases.
The takeaway
Retailers looking to reduce losses may find the largest gains outside the store floor, in supply chain, returns and administrative processes. Consumers may notice these efforts through stricter return policies and tighter inventory controls.
Further reading
For more on related trends, see Property Crime coverage across the site.
Source note: This article includes information reported by Loss Prevention Media.
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