Checkin’ the receipts… Recent headlines, smash-and-grab videos, and company earnings calls have spotlighted what appeared to be a spike in “organized retail crime.” But public crime stats haven’t always matched up to the retail industry’s claims. Now the National Retail Federation (US retail’s biggest lobby) has retracted its claim that organized theft was behind nearly half of the ~$95B in merch that disappeared in 2021. The real figure was closer to 5%.
Shrink grows: Inventory losses from theft, damage, and poor tracking are all wrapped up in a single term: shrink. It cost retailers $112B last year, and dozens of cos including Target, Walmart, and Dick’s Sporting Goods blamed shrink (and specifically theft) for profit hits and store closures.
Closin’ time: This fall, Target said it would shutter nine stores, citing “organized theft” and violent robberies. Meanwhile, stats showed that areas where stores were closing weren’t hit any harder by shoplifting/robberies than areas where stores were staying open. Actually, since 2019, the #s have dropped 7% in most major cities.
Skeptics take a bite outta crime… Though “organized retail crime” is happening, there’s debate around how big a bite it’s really taking out of retailers’ carts. Some analysts have accused retailers of using theft as a cover for underperformance and unpopular cost-cutting measures (closing less-trafficked stores, trimming inventory). Earlier this year, Walgreens said it might’ve “cried too much” over theft’s effect on its biz after SF police data didn’t match some of its statements.
Organized or not, the theft crackdown is here… Whether or not retailers are overstating theft’s impact, it appears to be working on officials. At least nine states have passed laws cracking down on organized retail crime. Now the bipartisan Combating Organized Retail Crime Act is making its way through Congress, and the NRF says it helped write the bill. Time’ll tell if such measures help curb retailers’ shrinkage.