Shrinkage in Europe: stock loss in the fast-moving consumer goods sector

Abstract

This paper presents the findings of the first pan-European survey of companies within the Fast Moving Consumer Goods sector. It provides a discussion on the definition of shrinkage and presents data on the extent, nature and causes of stock loss throughout the supply chain – from point of manufacture through to point of sale – as well as some of the approaches adopted to tackle the problem. It highlights the role of security and audit departments in minimising losses, and the need for companies to adopt a more strategic approach by involving not only other parts of their own organisations, but also cooperating with other companies within the supply chain. It concludes that unless companies begin to realise the extent of the problem and that all points of the supply chain are vulnerable to a wide range of threats, then losses will continue to represent a significant proportion of their annual turnover.