Retail Insider has released Q2 2026 Loss Prevention & Security: The Expanding Perimeter of Retail Risk, authored by Retail Insider founder and publisher Craig Patterson as part of Retail Insider Reports.
The report examines Canadian retail loss prevention, physical security, cybersecurity, fraud prevention, shrink reduction, payments security and retail risk management. Drawing on Retail Insider reporting, industry research and public data, it considers how risks once handled separately are becoming interconnected across stores, digital platforms, supply chains and corporate operations.
Retail Insider Reports are designed to deliver executive-level insights across major retail sectors and can be accessed through the Retail Insider Report Hub.
General Themes
- Risk has moved beyond merchandise: Loss prevention now encompasses employee safety, customer data, digital infrastructure, payment systems, inventory accuracy and operational continuity.
- Crime is influencing real estate decisions: Persistent theft and safety concerns can affect operating hours, capital investment, expansion plans and the viability of individual locations.
- Security can introduce commercial friction: Locked products, access controls and other protective measures may reduce shrink while also discouraging purchases and weakening the customer experience.
- Thin-margin retailers face greater exposure: Sustained shrink and rising security costs can quickly undermine locations in categories where profitability is already limited.
- Technology is widening the security mandate: Artificial intelligence, video analytics and electronic surveillance are becoming more important, but so are protection against cyberattacks, payment fraud and account takeovers.
- Data integrity is becoming a loss issue: Inventory errors, weak audit trails and inaccurate operational data can produce lost sales and financial damage even when no criminal act has occurred.
- Collaboration is increasingly necessary: Retailers, landlords, governments, law enforcement agencies and communities all have a role in responding to organized retail crime and repeat offenders.
Retail Insider Coverage
Retail Insider’s reporting documents how security pressures are translating into operating and investment decisions. The report points to 7-Eleven’s warning that crime and theft could place multiple Winnipeg locations at risk of closure. It also examines London Drugs’ closure of its Woodward’s location in Vancouver’s Downtown Eastside following years of operating losses and persistent safety challenges.
In Toronto, Dudley’s Hardware cited break-ins, vandalism and neighbourhood safety concerns among the factors behind downsizing and eventually closing its longstanding downtown location. These cases show how persistent crime can affect more than merchandise costs. It can determine whether a retailer maintains hours, carries certain products or continues serving a community.
Retail Insider coverage also followed research and industry developments involving EY, QBE, Equifax Canada and DALBAR. Together, those stories connect cyber threats, AI-enabled attacks, first-party fraud, customer friction and inventory accuracy to a broader retail risk environment.
Broader Industry Coverage
The report says retail theft now costs Canadian businesses more than $9 billion annually, while shrink is estimated at approximately 1.5 per cent of retail sales. Retail Council of Canada-led enforcement initiatives seized 121 weapons in 2024, and 81 per cent of retailers reported that organized retail crime offenders had become more violent. Repeat offenders accounted for 17.7 per cent of arrests during the council’s initiatives.
Those conditions are placing added pressure on frontline employees and on the economics of individual stores. Health and personal care stores, including pharmacies and drugstores, recorded a pre-tax profit margin of approximately 5.7 per cent in 2023, according to Statistics Canada data cited in the report. In a thin-margin business, sustained shrink and additional security spending can quickly influence a location’s viability.
The response also carries commercial risk. Research from DALBAR and Competitor IQ found that 38 per cent of shoppers had abandoned purchases because of security measures and in-store friction. Retailers therefore face a difficult calculation: controls strong enough to reduce loss may also restrict access, slow transactions and erode customer trust.
Beyond stores, Equifax Canada reported a 31 per cent year-over-year increase in first-party fraud. IBM placed the average cost of a Canadian data breach at nearly $7 million in 2025. These figures reinforce the report’s conclusion that payments, loyalty programs, inventory systems and digital commerce platforms now belong within the retail security discussion.
Editor’s Take
The central shift is that loss prevention has become a question of enterprise resilience and market presence. Crime, fraud, cyber threats and weak operational data can all influence where retailers invest, how stores are designed and whether certain locations remain viable. The retailers under the greatest pressure may be those operating essential, thin-margin stores in communities already vulnerable to losing local services. Effective loss prevention will require integrated decisions across security, technology, operations, real estate and customer experience.
Conclusion
Read the full Q2 2026 Loss Prevention & Security: The Expanding Perimeter of Retail Risk for its analysis of the forces changing retail security in Canada.
The full report and other Retail Insider Reports are available through the Retail Insider Report Hub.
