Financial Impact and Reduction Efforts
- Walmart’s Annual Shrinkage Cost: Walmart loses about $3 billion each year to shrinkage.
- Shrinkage as a Percentage of Sales: In 2019, shrinkage made up 1.38% of Walmart’s total sales.
- Budget Increase for Loss Prevention: In 2017, Walmart boosted its loss prevention budget by roughly 30% to tackle shrinkage.
- Shrinkage Reduction Through Training: New employee training programs in 2017 helped reduce shrinkage by 0.05%.
- Cost Savings from Reduction Efforts: In 2017, Walmart’s efforts to cut shrinkage saved the company approximately $167 million.
Shrinkage Contributors
- Employee Theft: A significant 43% of Walmart’s inventory shrinkage is due to employee theft.
- Shoplifting: Shoplifting contributes to 36% of Walmart’s inventory shrinkage.
- Vendor Fraud: Fraud by vendors accounts for 5.4% of the total shrinkage.
Ranking and Comparison
- Shrinkage Ranking Among Retailers: Walmart is the second highest among major US retailers in terms of shrinkage as a percentage of sales.
- Average Shrink Rate: Walmart’s average shrink rate is categorized as “medium,” ranging from 1.01% to 1.99% of sales.
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Technological and Security Measures
- Use of Investigators: Walmart employs over 2,000 investigators to help curb shrinkage.
- Impact of Security Investments: Investments in security measures have decreased both shrinkage and organized retail crime.
- AI-Powered Facial Recognition: Walmart uses AI-driven facial recognition to identify shoplifters and reduce shrinkage.
- RFID Technology: RFID technology is utilized by Walmart to improve inventory control and reduce shrinkage.
Additional Insights
- Comparison to Fortune 500: Walmart’s annual losses from shrinkage are greater than the total revenue of many Fortune 500 companies.
Alison Adams, a Philly native and proud University of Pennsylvania alum, is your go-to Career Expert with a laid-back approach. She’s been in the job seeker’s shoes and knows how to navigate the wild world of work. Alison’s all about sharing practical tips and tricks with a personal touch, making her a favorite for those looking to level up their careers.