by Michael Snyder, The Economic Collapse Blog:
If we don’t fix this, will the retail industry be able to survive? There has always been shoplifting, but in the old days it was at a level that made it only a minor nuisance to the big box retailers. Unfortunately, now everything has changed. Highly organized gangs have developed extremely sophisticated plans for how to rapidly loot our major retailers, and the best ones can be in and out in just minutes. Those goods are then resold online or in the streets, and the amounts that we are talking about are absolutely staggering. In fact, as you will see below, theft is now costing retailers in this country about 100 billion dollars a year.
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This week, Target made headlines all over the nation when it publicly admitted that theft will cost it 500 million more dollars than it did last year…
Target said Wednesday that organized retail crime will fuel $500 million more in stolen and lost merchandise this year compared with a year ago.
Target’s inventory loss, called shrink, totaled about $763 million last fiscal year, based on calculations from the company’s financial filings. With the anticipated increase, shrink this year would surpass $1 billion.
Let’s do some math.
763 million from last year plus 500 million more this year equals 1.263 billion dollars.
Please keep in mind that this is just one chain.
As Target CEO Brian Cornell openly admitted earlier this week, organized retail crime has become a massive problem “across the entire retail industry”…
‘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.
‘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,’ CEO Brian Cornell said on a call with reporters.
In the entire history of our nation, we have never seen anything quite like this.
Do you remember all the looting that we witnessed during the riots of a couple years ago?
Well, now the looting literally never stops, and it has become very sophisticated…
According to the NRF report, which conducted its latest assessment in partnership with global risk advisory firm K2 Integrity, these organized retail crime groups “primarily favor large national retailers and big-box retailers, and cargo shipments for booster operations.” They are also more likely to target everyday consumer goods rather than luxury products. Based on an analysis of 116 groups, 81% exclusively stole general consumer goods.
These groups have also been planning out their booster operations in advance by studying store layouts, camera and exit locations, understanding the types of anti-theft precautions and knowing the different store policies for stopping suspected thieves, the report said. Boosters are known as the individuals who are paid to commit theft on behalf of these groups.
In 2020, theft cost U.S. retailers 90.8 billion dollars, and that number increased to 94.5 billion dollars in 2021…
Last year, a survey from the National Retail Federation, an industry group, found that so-called “shrink” — or losses attributed to theft, fraud or employee error — amounted to $94.5 billion in losses in 2021. That was up from $90.8 billion in 2020. And the survey found that retailers reported a 26.5% increase in organized retail crime, on average.
The final number for 2022 is expected to be somewhere around 100 billion dollars, and the final number for 2023 is expected to be way above 100 billion dollars.
For a while, major retailers tried to weather the storm because they had invested so much money in these stores.
But now retailer after retailer is shutting down locations in the cities where organized retail crime is the worst. In fact, even Walmart is now shutting down stores in the most troubled areas…
Walmart decided to shut 17 of its stores across nine states after CEO Doug McMillon warned in December that theft was the highest it’s ever been around the country and if it did not slow down, stores would have to close.
And the company announced on Tuesday it would be shutting half its Chicago stores, mostly located on the crime-ridden city’s south and west sides, because they are losing tens of millions each year.
So where do we go from here?
That is a very good question, because conditions in many of our major cities just continue to get worse and worse.
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