Merchandising theft, which has been a problem since the beginning of retail shopping, is occurring so much on the store floors of the Minneapolis-based retailer, Target Chairman and CEO Brian Cornell put the subject front and center during the latest earnings call — saying it's costing Target hundreds of millions of dollars.
Cornell told the audience that theft will cost his company $500 million this year and combined with inventory shrinkage from 2022 (a $700 million profit hit), Target stands to lose $1.2 billion in profits in the coming months.
According to the National Retail Federation (NRF) study that was released a few months ago, stolen goods from stores resulted in $94.5 billion in losses in 2021. In 2020, the figure was $90.8 billion. In addition, almost 33% of the companies that were surveyed said they were much more concerned about retail theft now than in years prior.
The NRF released another report last month looking at 132 crime groups and their booster operations over the last eight years. The analysis showed that 16% used at least one violent tactic (smash and grab, use of weapons, battery, flash mob tactics, threats of violence) in stores.
Violence was so bad for a Whole Foods store in San Francisco the company, owned by Amazon, decided to temporarily close the flagship operation. The 65,000-square-foot Whole Foods store opened last year at Trinity Place in the city’s Mid Market neighborhood. Whole Foods said it opted to close the location to “ensure worker safety,” according to reporting from ABC. Whole Foods additionally said that all of the employees would be transferred to nearby locations.
Target’s Cornell did not say any Target stores would close due to the theft issues, but he does want employees to be better prepared in how to handle such incidents. “Asset protection” employees also might be added at some locations, and the company also could resort to locking up certain items.
