Shrinkage in Western Europe has been falling since 2002, when it was as high as 1.77 per cent. In the former Soviet states of Central Europe, however, shrinkage now seems to be rising, as indicated by Table 1. Average shrinkage in Western Europe was 1.23 per cent in 2006, compared with the Central European figure of 1.35 per cent.

There are great differences between countries, which may reflect accountancy differences as well as actual differences in crime levels. The lowest shrinkage rates were: Switzerland (0.92 per cent), Austria (0.96 per cent), and Germany (1.07 per cent), which was similar to the pattern shown in the 2001 Report. The highest shrinkage rates were: the Czech Republic (1.42 per cent), Slovakia (1.40 per cent), and Hungary (1.38 per cent). The United Kingdom, which had suffered the highest rate of shrinkage in 2002, had made the greatest overall reduction in shrinkage by 2006 – to 1.33 per cent.

Sources of crime and shrinkage
In every country in Europe, customer crime is seen to be the main problem, accounting for 48.8 per cent of total overall shrinkage losses. Staff crime is seen to be a growing problem and the main retailers in every country are concentrating hard on how to combat employee theft. Losses caused by dishonest staff are now thought to be 30.7 per cent of shrinkage – an increase on 2001, when the Theft Barometer started. In the United States, staff crime is seen as the single-most important crime problem that retailers face. Many food retailers and mass merchandisers in Europe agree with their American counterparts that more is stolen by staff than by dishonest customers.

Policies and procedures, accounting systems, accuracy and better staff training are all ways in which retailers can reduce the share of losses caused by ‘internal error'. As well as focusing much more upon crime losses, Europe's retailers have committed resources to making their internal processes more effective. Internal error can never be completely eliminated, but it should be possible to reduce it by 20 per cent or more in even the best-run organisations, thereby cutting losses and showing the most intractable problems that remain.

What goods are stolen
People will steal anything if they can, but the most likely goods to be stolen are small, expensive and sought-after branded items. These items are valuable in themselves, but are also most easily resold to other people. Table 2 demonstrates the most stolen items in Europe's retailers. In the fashion industry, the main labels such as Armani, accessories, handbags, leather goods and perfumes are the most likely candidates for theft, but any type of clothing or footwear can be stolen.