A retail group said organized retail crime accounted for 'nearly half' of 2021's $94.5 billion inventory loss. It didn't.

• The National Retail Federation has retracted a key stat about the impact of organized retail crime.
• A report published in April erroneously said ORC represented "nearly half" of inventory shrink.
• The figure was based on an advocacy group's estimate, but is inconsistent with other NRF reports.

The National Retail Federation just confirmed what many have suspected — reliable stats about organized retail crime are hard to come by.

In a remarkable reversal, the industry group has retracted a key statistic about the impact of organized retail crime (ORC) in 2021 after it could not support the figure with firm data.

A report published in April erroneously said that ORC represented "nearly half" of the industry's $94.5 billion inventory shrink in 2021. Last week, the NRF updated the report to remove that figure, Reuters reported.

A spokesperson for the NRF confirmed the change to Business Insider and specified that the change applied to one sentence in the report.

The spokesperson explained that the figure was based on congressional testimony from the president of an advocacy group, the Coalition of Law Enforcement and Retail, which estimated organized retail crime cost retailers $45 billion per year.

"We stand behind the widely understood fact that organized retail crime is a serious problem impacting retailers of all sizes and communities across our nation," the spokesperson said. "At the same time, we recognize the challenges the retail industry and law enforcement have with gathering and analyzing an accurate and agreed-upon set of data to measure the number of incidents in communities across the country."

The NRF further explained that an analyst from K2 Integrity, a risk consultancy that co-authored the report, inferred the figure based on the testimony and the NRF's annual survey on inventory shrink.

Neither Business Insider nor Reuters could reach representatives from the coalition for clarification about the basis for their estimate, which exceeds the NRF's own estimates for external theft.

The NRF's most recent survey found that retailers lost over $112 billion last year to "shrink," which includes merchandise lost to damage, error, employee theft, and external theft.

External theft, which includes organized retail crime, represented 36%, or about $40 billion of total shrink in 2022. The NRF's report for 2021 found external theft represented about $35 billion of the year's $94.5 billion inventory shrink.