The big shrink
Top executives at some of America’s largest retailers have found themselves repeating each other’s soundbites over the last couple of weeks, as they increasingly talk about “shrink”.
For those unfamiliar with the jargon, retail shrink is a broad term used for the issue of missing inventory, and was referenced by execs from Dick’s Sporting Goods, Dollar Tree, Macy’s, Foot Locker, Home Depot, and Walmart, all within the last 14 days. Some have slammed the discussions, noting that the euphemism often obscures a bigger issue at play in the US retail industry — theft.
Stealing focus
Foot Locker and Dick’s Sporting Goods suffered more than most after their shrink-referencing reports, with shares in each company plummeting 33% and 24%, respectively, after the pair laid out how theft has contributed to weaker earnings in recent months. Rising thefts at Walmart and Target could suggest that lower-income consumers more vulnerable to inflation are feeling the pinch, although Dick’s CEO said that the impact of “organized" retail crime was significantly larger than expected.
To combat shoplifting, retailers are increasingly sealing higher-priced products in locked cases and rolling out anti-theft tech.
