Mark Cohen, director of retail studies at Columbia Business School, agreed that the “multi-layered” problem of escalating retail crime does shine a light on social distress at any given point in time.
“We’re in a period where bad behavior is legitimized, even normalized,” said Cohen. “Gun violence has exploded, bad behavior among citizenry has exploded, civil discord is high and Americans are very polarized.”
Retail crime, he said, is an unfortunate consequence of this as well.
“It’s a manifestation of bad behavior. I can sympathize with someone stealing a sandwich because they are hungry, but not with a thief clearing an entire shelf of products and calmly walking out of a Target store.”
According to the National Retail Federation, the industry’s biggest trade group, large-scale store theft is becoming a bigger part of annual retail “shrink,” a term that refers to merchandise that goes missing due to theft, fraud, damage and other reasons.
The NRF said total annual shrink reached $94.5 billion in 2021, up from $90.8 billion from 2020. Nearly half was attributed to large-scale theft of products. The group said retailers on average saw a 26.5% increase in this type of theft over the previous year.
Retailers are losing profit
For Target, the scope of the challenge is immense, Target’s CEO Brian Cornell, told analysts during the company’s earnings call last week.
“The problem affects all of us, limiting product availability, creating a less convenient shopping experience and putting our team and guests in harm’s way,” said Cornell, who pegged it as an urgent issue “not just for Target, but across the entire retail industry.”
The retailer told CNN that it was experiencing a large number of incidents of shoplifting and organized retail crime in Target stores nationwide.
While no item is being spared, it said many of the products frequently stolen are necessities, such as soaps, shampoos and other personal care items.
But the issue goes far beyond Target, the company believes. “While we’re doing all we can to address the problem, it’s an industry and community issue that can’t be solved by a single retailer,” Cornell said.
But even with a retail bellwether like Target sounding the alarm on store theft as a pervasive, persistent and worsening trend, the gravity of the problem itself
can be difficult to prove.
Within the industry, at least one major player, for instance, has argued that the problem is being overhyped.
Walgreen’s earlier this year changed its tune on store theft hurting its business, saying,
“Maybe we cried too much last year.”
Target’s rival Walmart
(WMT), which has more than 100 million shoppers head to its stores in the US every week, said rising store theft could force it to raise its prices if the trend doesn’t correct itself. “If that’s not corrected over time, prices will be higher, and/or stores will close,” Walmart
(WMT) CEO Doug McMillon said
in a CNBC interview in December.
At the same time, Walmart has also been
closing stores because of its poor performance and sagging sales, not because of crime.
Despite these conflicting signals, what can’t be argued is that retailers have, and will continue to be, vulnerable to shoplifting, said Flickinger.