Rising Theft Causes US Retailers to Lock Up Everyday Products
Toothpaste, chocolate, washing powder, and deodorant are just a few of the everyday products that are increasingly being locked up at retailers across the United States. The move comes as petty theft and organized shoplifting have been on the rise, coinciding with the struggles consumers face with the rising cost of living.
Major retailers, including Walmart, Target, CVS, Walgreens, Home Depot, and Foot Locker, have all expressed concerns about the increasing number of thefts in their latest earnings results. The impact of stealing on their inventory has been significant, with some companies revising down their earnings per share guidance for the year.
“Organized retail crime, and theft in general, is an increasingly serious issue impacting many retailers,” said Lauren Hobart, chief executive at Dick’s Sporting Goods. She added that theft incidents involving violence or threats of violence have increased by 120 percent in their stores during the first five months of this year.
Target chief executive Brian Cornell also highlighted the unacceptable amount of retail theft and organized retail crime his team continues to face. He noted that the loss of inventory has been well above sustainable levels, signifying a growing problem that needs to be addressed.
The surge in theft comes as interest rates have increased over the past 18 months, making it more expensive for consumers to borrow funds for big-ticket purchases and for companies to expand their businesses. The squeeze on consumers’ finances has been felt, resulting in increased theft incidents.
According to the National Retail Federation’s 2022 retail security survey, retailers lost an estimated $94.5 billion nationwide to “shrink” in 2021 alone. This includes losses from staff theft, shoplifting, or administrative errors. The survey also highlighted a 26.5 percent rise in organized retail crime in 2021, with the majority of respondents attributing the increase to the pandemic.
To combat theft, retailers have been implementing various security measures. Transparent walls with locks on shelves, padlocked chains on refrigerators, and call buttons scattered throughout aisles for staff assistance have become common sights. Additionally, some stores have been reducing the amount of inventory on unprotected shelves to limit shoplifting.
Despite these efforts, the security measures have not proven to be effective deterrents in all cases. Media reports in June highlighted a man using a blowtorch to melt locked cases at a Walgreens outlet in Queens, New York, filling a bag with products, and leaving without paying. Similar incidents have been reported in CVS outlets, prompting concerns about the safety of both employees and customers.
In response, some retailers are asking their staff not to intervene in theft incidents or contact the police, citing safety concerns. Some companies are even considering closing certain locations due to the significant rise in theft and violence.
The impact of theft on retailers is evident, with Walgreens closing five stores in San Francisco last year and Walmart shuttering four outlets in Chicago this year. Walmart’s chief financial officer, John Rainey, expressed concern about the increase in shrinkage, highlighting the potential for rising prices as a result.
Online users have also reported an increase in “flash rob” incidents, where a group of people enter a store, grab items within reach, and swiftly exit. In one incident at a Nordstrom store in Los Angeles, around 30 masked individuals stole over $300,000 worth of luxury items, using bear spray on a security guard.
As retailers grapple with the growing issue of theft, finding effective solutions becomes paramount. Balancing the need for security measures with providing an accessible shopping experience for customers is a challenge that retailers must navigate in the face of rising theft incidents.