Shop Lifting Reaches New Highs
In national news reports, prior to Christmas, Walmart CEO Doug McMillon said that his company was experiencing incidents of theft “higher than what its historically been.” He explained that rising in-store theft, which often goes unchecked by local law enforcement, could force Walmart to raise prices “or even close some stores.”
His comments were buttressed by similar reports from Target’s CEO Brian Cornell a month earlier, saying that their company, too, had seen a “significant increase in organized retail crime across our business.”
Year-to-date inventory shrink reduced Target’s gross margin by more than $400 million compared to last year, with an expected total loss of more than $600 million for the full year.
Across all retail brands, the average shrink rate in 2021 was 1.4%, according to the National Retail Federation’s (NRF) 2022 National Retail Security Survey. That represents $94.5 billion in total losses, up from $90.8 billion in 2020, the association found.
Organized retail crime was up 26.5% in 2021, according to NRF.
“This is an industrywide problem that is often driven by criminal networks, and we are collaborating with multiple stakeholders to find industrywide solutions,” Target CFO Michael Fiddelke told analysts.
Target, in a statement to WGB, said it was working with law enforcement, legislators, community partners and retail trade associations to address the “growing national problem” of retail theft.
The retailer said it is a strong supporter of the INFORM (Integrity, Notification and Fairness in Online Retail Marketplaces) Consumers Act that increases accountability and prevents people from selling stolen goods on online marketplaces.
At Walmart, the retailer has put safety measures in place on a store-by-store basis, a process that relies on proper staffing of local law enforcement, McMillon noted.
McMillon added that he would like to see firmer prosecution of shoplifters as well.
“If that’s not corrected over time, prices will be higher and/or stores will close,” he told CNBC. “It’s really city by city, location by location. It’s store managers working with local law enforcement. … It’s just policy consistency and clarity so we can make capital investments with some vision.”