by Zero Hedge
An increasing number of current and former CEOs have issued warnings about an increase in retail thefts across the United States, which could trigger higher prices and cause locations to close.
“Today, this thing is an epidemic. It’s spreading faster than COVID,” former Home Depot CEO Bob Nardelli told Fox News on Dec. 8.
“The degree of severity now, it’s not just theft, it’s smash and grab. There’s an entitlement out there that if you have it, you’ve worked hard to earn it, I want it. I’m just going to take it.”
Last week, an 83-year-old Home Depot worker was killed after being shoved by a thief at a North Carolina location, officials said. Gary Rasor, the worker, attempted to confront a suspect who was making off with three power washers before he was pushed to the ground; he later died because of complications from his injuries.
While appearing on CNBC on Dec. 6, Walmart CEO Doug McMillon said retail theft is “higher than what it has historically been” and suggested that it will create widespread problems in some areas.
“If that’s not corrected over time, prices will be higher, and/or stores will close,” McMillon said.
“I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it.”
He didn’t indicate what locations could be closed due to theft incidents.
In September, the National Retail Federation reported that retail theft and other inventory loss—known as shrink—reached $94.5 billion in 2021, while reports indicate that retail theft incidents increased by about 26 percent last year.
“Violence is an increasingly important concern among retailers,” including shootings and assault, the report reads. “As has been detailed throughout this report, external theft and [organized retail crime] in particular, is a significant and growing area of concern for retailers.”
In an investor call, Target Chief Financial Officer Michael Fiddelke said, “This is an industry-wide problem that is often driven by criminal networks, and we are collaborating with multiple stakeholders to find industry-wide solutions.”
The amount Target has shrunk over the past year, “has already reduced our gross margin by more than $400 million versus last year, and we expect to reduce our gross margin by more than $600 million for the full year,” he said.
In the call, Fiddelke said shoplifting has increased by about 50 percent year-over-year. Most of those shoplifting incidents are due to organized retail theft, not individual shoplifters, he said.
Organized looting and retail theft gangs have caused shortfalls for the retail industry amid supply chain problems and years of COVID-19-related disturbances, according to the U.S. Chamber of Commerce.
“Retail theft is becoming a national crisis, hurting businesses in every state and the communities they serve. We call on policymakers to tackle this problem head-on before it gets further out of control. No store should have to close because of theft,” the organization stated. “These crimes are not victimless.
“In addition to the growing number of thefts that turn violent, innocent consumers, employees, local communities, and business owners and shareholders bear the costs of rising retail theft. Twenty-five percent of small businesses report raising prices as a result of shoplifting. Some retailers have been forced to shutter locations in response to rampant theft.”
Notably, drugstore Walgreens has closed several locations in San Francisco amid a rise of thefts and shoplifting that had been blamed on policies implemented under District Attorney Chesa Boudin, who was recalled earlier this year.
18 people were arrested in Los Angeles when police busted an organized crime ring that targeted clothing and shoe stores, authorities said.
Read more here…