REPRESENTATIVES from several retail giants across the country have complained that organized theft has begun to seriously cut into their profit margins.
Kohl’s, Foot Locker, Target, and Walmart are just a few of the national retail chains that have pointed to an increase in organized theft as a primary cause of their current financial woes.
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Large-scale theft falls into the category of “shrinkage” loss for most retailers, grouped with other causes like breakage or employee theft.
Target CEO Brian Cornell focused on the problem during a recent earnings call, where he announced that the store had surpassed earnings expectations but faced a dire future ahead.
“The problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm’s way,” he said on the call as reported by CNBC.
He expects theft to account for an additional $500million loss within the next year, he said.
Foot Locker CEO Mary Dillon said that, as an apparel seller, the increase in organized shoplifting has hit them particularly hard, according to a report by FOX Business.
The total cost of shrinkage in 2022 for retailers in the US is estimated to be about $100 billion, David Johnston, spokesperson for the National Retail Federation (NRF), said in the report.
And the risk goes beyond profit losses, Johnston said.
“There have been employees and customers injured,” he added. “There have been employees killed while these shoplifting events are taking place.”
A California man was shot and killed in April while trying to prevent shoplifting at a Home Depot where he worked.
Walmart CEO John Furner told investors on another recent earnings call last week that retail theft “has been really challenging” but that “we’re going to actively manage this issue,” he said.
He noted that “protecting our customers, protecting our associates and protecting our assets and inventory” could not be done alone, however.
“It will take communities stepping up and enforcing the law to be able to bring this issue back under control,” he said.
Earlier this year, Walmart chose to close its last remaining stores in Portland, Oregon over poor performance and uncontrollable levels of theft.
“You can always replace a product. You can’t replace the individual,” Johnston said.
Groups like the NRF have been pushing for national legislation to help combat the growth in retail crime, including the creation of a network of interdepartmental law enforcement agencies to share information and investigative tools.
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