Common household products like toothpaste, chocolate, washing powder, and deodorant are increasingly being secured by US retailers due to a rise in petty theft and organized shoplifting, as consumers struggle with the cost of living.
Major retailers such as Walmart and Target, pharmacy chains CVS and Walgreens, home improvement company Home Depot, and footwear retailer Foot Locker have all expressed concerns over the rise in thefts, including violent incidents, in their recent earnings reports.
Lauren Hobart, CEO of Dick’s Sporting Goods, highlighted during a conference call that theft, including organized retail crime, is a growing issue impacting many retailers. The thefts had a “meaningful” impact on the company’s inventory, affecting both its Q2 results and expectations for the rest of the year. As a result, Dick’s has revised its earnings per share expectations for the year from $12.90-$13.80 to $11.33-$12.13.
Target CEO Brian Cornell also expressed concern about the increase in violent theft incidents, noting that the loss of inventory was well above sustainable levels. This comes as interest rates have risen sharply over 18 months to curb inflation, leading to higher lending costs for big purchases and business expansions, thereby putting pressure on consumers.
The National Retail Federation’s 2022 retail security survey estimated that retailers lost $94.5 billion nationwide to “shrink” in 2021, which includes losses from staff theft, shoplifting, and administrative errors. The survey also found a 26.5% increase in organized retail crime in 2021, with most respondents attributing the rise in risks to the pandemic.
To counter this, stores have been installing transparent walls with locks on shelves, padlocked chains on refrigerators, and call buttons in aisles for staff. However, these measures have not always been effective. For example, a man in Queens, New York, used a blowtorch to melt locked cases at a Walgreens outlet and stole products in front of customers and employees.
Some retailers have advised their staff not to intervene during thefts or contact the police for safety reasons. Some are even considering closing stores due to the rise in theft and violence. For example, Walgreens closed five stores in San Francisco in 2021, and Walmart closed four stores in Chicago this year, both citing a lack of profitability.
Walmart CFO John Rainey noted that “shrink” has increased slightly this year and last year, varying across the country. He expressed concerns that this could lead to rising prices.
Additionally, there have been more reports of “flash rob” incidents, where groups rush into a store, grab items, and quickly leave. In one instance, around 30 masked individuals stole over $300,000 worth of luxury items from a Nordstrom store in Los Angeles and used bear spray on a security guard.
