Target to Close Stores Due to Increased Violence and Retail Crime: Comment and Analysis

Target to Close Stores Due to Increased Violence and Retail Crime: Comment and Analysis

Target to Close Nine Stores Due to Increased Violence and Organized Retail Crime

Target has announced that it will be closing nine stores located in urban areas across four states, citing a rise in violence related to theft and organized retail crime as the reason behind the decision. By October 21, three stores in Portland, Oregon, one in Seattle, one in New York City, and three in the San Francisco-Oakland area will be shutting down, as the level of retail crime at these locations has reached a point that threatens the safety of both customers and employees, as well as the overall business performance of the stores.

In a news release, Target stated, “We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all.” The company also mentioned that some employees will have the opportunity to transfer to other Target stores.

This announcement from Target comes as the company has been vocal about its struggles with theft and organized retail crime. During a second-quarter earnings call last month, Target CEO Brian Cornell revealed that the stores had experienced a 120 percent increase in theft incidents involving violence or threats of violence in the first five months of this year. In May, Target reported $500 million in losses due to shrinkage, but did not specify how much of that could be attributed to external theft.

However, Target is not alone in facing the challenges posed by shoplifting, organized crime, and violence. Other major retailers such as Home Depot, Lowe’s, Dollar Tree, Dick’s Sporting Goods, and Ulta have also highlighted the issue of shrinkage during recent earnings calls, prompting some of them, including Walmart, to close certain locations.

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According to the National Retail Federation’s security survey, external theft accounted for an average of 36 percent of shrink-related losses at physical stores in 2022. David Johnston, the retail federation’s vice president for asset protection and retail operations, stated, “The situation is only becoming more dire. Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.”

Last year, retailers suffered $112.1 billion in losses due to shrinkage, up from $93.9 billion in 2021, with over half of those losses being attributed to employee theft and operational and processing errors. In recent months, stores across the country have been targeted by flash-mob robberies, after-hours break-ins, and thefts mid-supply chain.

To address these challenges, Target has implemented several measures to combat theft and organized retail crime, such as hiring additional security team members, utilizing third-party services, locking up certain merchandise, and providing training to employees on protective measures and de-escalation techniques. The company has also invested in technology updates to better detect and track cybercrimes. Additionally, Target supported the recently passed Inform Consumers Act, which requires online marketplaces to report and verify information about high-volume third-party sellers.

It is worth noting that Target has faced other issues unrelated to theft this year, with several store locations experiencing bomb threats and swatting incidents following their participation in Pride Month.

While Target has chosen to close some stores to address the issues of violence and organized retail crime, other retailers have taken different approaches. For example, regional grocery chain Giant Food is removing national label products from its beauty and health aisles, implementing receipt checks at the door, hiring more security guards, closing secondary entrances, and limiting the number of items permitted through self-checkout areas. Dollar Tree is adopting a defensive approach to shrink by locking up more items, moving them behind counters, or discontinuing them. Walgreens has introduced a new anti-theft store in downtown Chicago, where low-value items are displayed on two aisles, while the rest are kept behind a counter and must be ordered digitally.

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As retailers continue to grapple with the rising challenges of theft and organized retail crime, finding effective solutions will be crucial to ensuring the safety of their stores and employees, as well as maintaining their business performance.

– National Retail Federation


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