CareCredit - Women's Health April 2024

Target to Shutter 9 Stores Due to Retail Theft Wave

Target

Target is blaming an apparent wave of shoplifting for the closure of nine of its stores.

The retailer is shuttering locations Oct. 21 in New York City; San Francisco; Seattle; and Portland, Oregon, according to a Tuesday (Sept. 26) press release.

“In this case, we cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” Target said in the release.

The company added that it had “invested heavily” in theft deterrents, such as hiring more guards and implementing other tools.

“Despite our efforts, unfortunately, we continue to face fundamental challenges to operating these stores safely and successfully,” the release said.

The crime wave is hitting Target as the company is dealing with a decline in retail spending, driven by high inflation and the return of student loan payments for many consumers.

Last month, the company reported earnings that showed comparable sales declining 5.4%, chiefly in discretionary categories.

The loss and its drivers were predicted in June by J.P. Morgan analyst Chris Horvers.

“We continue to believe that the consumer is broadly weakening while the share of wallet shift away from goods,” Horvers said in June. “Target has been giving back [market] share on a one-year view, and we believe this share loss could accelerate into back to school and linger into holiday given consumer pressures and recent company controversies.”

However, Target isn’t alone in reporting a rise in retail thefts. The National Retail Federation (NRF) announced this week that shrink — losses from theft, fraud or errors — rose to $112.1 billion in 2022, up from $93.9 billion the prior year.

“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” David Johnston, vice president for asset protection and retail operations at NRF, said Tuesday (Sept. 26).

The average shrink rate last year climbed to 1.6%, compared to 1.4% in 2021, the NRF said. Internal and external theft made up 65% of retail shrink.

Retail theft is also growing more violent, the organization said, with 67% of retailers reporting that saw an increase in violence and aggression from “organized retail crime” suspects compared to the prior year.

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