US stores voice alarm at ‘organised retail crime’, ‘flash rob’ attacks

  • Organised retail theft is having an impact on stores in the US.
  • There was a 120% increase in theft at Target.
  • Retailers are implementing security measures to counter the trend.

Toothpaste, chocolate, washing powder and deodorant – everyday products are increasingly under lock and key at US retailers, as petty theft and organised shoplifting rise while consumers grapple with costs of living.

Major retailers Walmart and Target, drugstore chains CVS and Walgreens, as well as home improvement firm Home Depot and footwear seller Foot Locker are among those to have voiced concern over more thefts – including violent incidents – in their latest earnings results.

“Organised retail crime, and theft in general, is an increasingly serious issue impacting many retailers,” said Lauren Hobart, chief executive at Dick’s Sporting Goods during a conference call.

The impact of stealing on the company’s inventory was “meaningful” on both its second quarter results and expectations for the balance of the year, she added.

Dick’s now expects earnings per share for the year at $11.33 to $12.13, down from earlier guidance of $12.90 to $13.80.

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“During the first five months of this year, our stores saw a 120% increase in theft incidents involving violence or threats of violence,” said Target chief executive Brian Cornell in a separate briefing.

He added:

Our team continues to face an unacceptable amount of retail theft and organised retail crime.

He noted a loss of inventory well above what is sustainable over the long term.

This comes as interest rates have surged from close to zero to around 5.5% over 18 months – the highest level in 22 years – as policymakers seek to curb inflation.

Higher lending costs make it pricier to borrow funds for big ticket purchases, or for companies to expand their businesses – and consumers have been feeling the squeeze.

According to the National Retail Federation’s 2022 retail security survey, retailers lost an estimated $94.5 billion nationwide to “shrink” in 2021 alone.

Retail shrink means the loss of inventory from factors including staff theft, shoplifting or administrative errors.

The survey also noted that retailers on average saw a 26.5% rise in organised retail crime in 2021, with a majority of respondents reporting that the pandemic has led to an increase in risks.

Locked up deodorant to prevent shoplifting are seen at a Duane Reade drugstore and pharmacy in New York City. Major retailers Walmart and Target, drugstore chains CVS and Walgreens, as well as home improvement firm Home Depot and footwear seller Foot Locker are among those to have reported more thefts – including violent incidents.

As a result, stores have been installing transparent walls with locks on shelves, sometimes padlocked chains on refrigerators, and scattering call buttons in aisles for staff.

Unprotected shelves are often sparsely stocked as well, to limit shoplifting.

But such security measures are not always an effective deterrent.

In June, a man in a hooded jacket and face mask used a blowtorch – in full view of customers and employees – to melt locked cases at a Walgreens outlet in Queens, New York.

He then filled a bag with products and left without paying, according to media reports.

Residents in Queens have also launched a petition surrounding unsafe conditions in several CVS outlets.

According to media reports, some retailers are asking their staff not to intervene in the event of theft and not to contact the police, for their own safety.

Some are considering closing sites, with Giant mulling the closure of a Washington supermarket where theft and violence “is significant and getting worse”.

It is becoming increasingly difficult to operate under these conditions, a spokesperson told AFP, adding that other locations were also affected.

Walgreens closed five San Francisco stores in 2021 due to theft, while Walmart shuttered four Chicago outlets this year, officially due to a lack of profitability.

Walmart chief financial officer John Rainey noted in mid-August:

Shrink has increased a bit this year. It increased last year. It’s uneven across the country.

“We don’t want it to go up obviously because it could cause prices to rise,” he added.

But online users are reporting more “flash rob” incidents where a group surges into a store, seizes items within reach and runs off.

On 12 August in a Nordstrom store in Los Angeles, around 30 masked people stole more than $300 000 worth of luxury items and used bear spray on a security guard, according to the police.

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