by Arsenio Toledo, Natural News:
Organized retail crime is expected to cost major retailer Target up to $500 million in lost profits this year due to inventory shrinkage, or theft of merchandise. Factoring in the approximately $750 million in profits Target lost last year from inventory shrinkage, the company is on pace to see $1.2 billion in profits go up in smoke over a two-year period due to organized retail crime.
Brian Cornell, Target chairman and CEO, warned that the problem is happening nationwide, getting worse and is affecting most merchandise departments. (Related: Major retailers will keep shutting down their stores until organized retail crime gets under control.)
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“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,” said Cornell in a call with reporters. “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,” he continued. “Beyond safety concerns, worsening shrink rates are putting significant pressure on our financial results.”
Target is engaged in a number of “mitigation efforts” to combat retail theft. These efforts include making adjustments to the assortment of products on display in affected stores and installing fixtures to protect merchandise.
Cornell said the company is also “actively collaborating with legislators, law enforcement and retail industry partners to advocate for public policy solutions to organized retail crime.”
Organized retail crime getting worse for the entire industry
Cornell noted that even if Target’s efforts at mitigating crime in its stores are successful, the issue can’t be solved by a single retailer because organized retail crime is “a worsening trend” and “an urgent issue” for the entire industry. Walmart alone reportedly loses around $3 billion in profits each year due to shoplifting.
“It is widespread, and I can tell you, as I talk to my retail peers, it’s a common theme across all of retail,” said Cornell. “It’ll vary by market, individual store, but the trends have been very persistent. And year on year we continue to see increases [in theft].”
According to the National Retail Foundation’s (NRF) National Retail Security Survey, goods stolen from stores, which contribute to inventory shrinkage, cost retailers in the United States $94.5 billion in losses in 2021, up from $90.8 billion in 2020.
Retailers on average also saw a 96.5 percent increase in organized retail crime incidents and eight in 10 retailers have reported increased instances of violence and aggression associated with organized retail crime incidents in their stores.
Nearly a third of companies surveyed have called out organized retail crime as becoming “much more” of a concern in the past few years.
“Organized retail crime has been a major concern for the retail industry for decades, endangering store employees and customers, disrupting store operations and inflicting billions in financial loss for retailers and the communities they serve,” said NRF CEO Matthew Shay. “These concerns have grown in recent years, as criminal groups have become more brazen and violent in their tactics and are using new channels to resell stolen goods.”
Organized retail crime is estimated to cost federal and state governments alike nearly $15 billion in lost tax revenue annually, not including lost revenue from sales taxes, according to the Department of Homeland Security.
