Target has reported a disturbing surge in retail crime, which is anticipated to cause an estimated $500 million more in losses and stolen merchandise this year compared to the previous year. In fact, workers at a Target store in downtown San Francisco recently told a local newspaper that thefts occur with astonishing frequency.
But Target is far from the only retailer dealing with the issue.
Outdoor apparel and equipment retailer REI recently made headlines when it revealed its decision to close one of its top-performing stores, its downtown Portland location in Oregon.
The retailer invested over $800,000 in additional security measures last year, according to a MarketWatch report. Additionally, over the past two years, REI replaced windows with security glass, enhanced lighting and implemented round-the-clock security measures.
Despite those precautions, a company representative said the store experienced 10 burglaries throughout 2022. Additionally, on Black Friday, a car crashed through one of the store’s entrances. While shoplifting and crime were significant concerns, however, the company also said the store had outgrown its limited layout.
In April, Walmart made the decision to close four of its Chicago stores, citing annual losses of “tens of millions of dollars.” Although the retailer did not explicitly attribute the closures to retail theft, some individuals on social media promptly connected the decision to rising crime rates in the region.
According to the Chicago Police Department, thefts have increased by 25% in 2023 compared to the previous year, while robberies have seen an 11% rise.
In 2022, Walmart CEO Doug McMillon issued a warning that theft incidents in stores across the country had the potential to adversely affect the stores and potentially result in additional closures.
Walmart has opted to close a total of 21 stores spread across 12 states and the District of Columbia.
Nordstrom recently announced it will close two San Francisco stores, its Market Street Nordstrom Rack location, set to close July 1, and its mall department store at Westfield San Francisco Centre, which will be shuttered at the end of August.
The closures signify the end of Nordstrom’s presence in San Francisco since its establishment back in 1988. Jamie Nordstrom, chief stores officer, reportedly attributed the decision to close the San Francisco locations to the evolving dynamics of downtown San Francisco and a decrease in foot traffic.
Meanwhile, in April, Whole Foods announced that its downtown San Francisco store, which had been in operation for a year, would be temporarily closed “to ensure the safety” of employees, CNN reported.
When it opened in March 2022, the location was widely regarded as a “flagship store,” as one of the largest supermarkets in the area. It boasted a wide selection of 3,700 locally sourced products.
According to The San Francisco Standard, the store had experienced a reduction in operating hours last year due to incidents of theft. Furthermore, the store had to modify its bathroom facilities after syringes and pipes were discovered by the employees.
According to Target’s most recent quarterly earnings report, the big box retailer has become a prominent target for substantial theft incidents, resulting in a notable impact on its profits. As a result, the retailer is reevaluating its strategy for in-store operations.
In its latest earnings release on Wednesday (May 17), Target disclosed a significant projected decline of $500 million in profits for the current year, primarily attributed to inventory shrinkage, including theft of merchandise.
During the conference call, Target Chairman and CEO Brian Cornell expressed concern about the escalating issue, emphasizing its widespread impact on various merchandise departments nationwide. Cornell emphasized that the problem was not showing signs of improvement but rather growing more severe over time.
“The unfortunate fact is violent incidents are increasing at our stores and across the entire retail industry. And when products are stolen, simply put they are no longer available for guests who depend on them,” Cornell said. “Left unchecked, organized retail crime degrades the communities we call home. As we work to address this problem, the safety of our guests and our team members will always be our primary concern. Beyond safety concerns, worsening shrink rates are putting significant pressure on our financial results.”
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