I recently went to my neighborhood drugstore in New York City to buy some Tylenol and saw it locked up in a plastic shelf.
We’re used to seeing expensive jewelry stored behind glass or behind the counters at convenience stores, but these days, CVS, Best Buy, Home Depot, and other seemingly ordinary items (soaps, ice cream, detergent) are trapped in the store. –increasing. If you haven’t seen this yet where you live, chances are it will soon. Or maybe visit parts of America where it’s become the norm.
Are store thefts really on the rise, and if so, by how much? Hard data has proven difficult to come by, but nationally the problem may not be as bad as it sounds. According to the 2022 National Retail Federation Retail Security Survey, the average “shrinkage rate” (also known as inventory loss) last year was 1.4%, or about 94.5 billion out of $6.6 trillion in total retail sales. was a dollar. This is about the same percentage as in the last five years.
In the big picture, skeptics say it doesn’t matter.
Perhaps a shocking video of organized theft or an LA railroad robbery exaggerates the issue. But I don’t think it’s that simple. First of all, a significant portion of retail crime goes unreported. Another point is that these are rough numbers. Some areas have flattened shoplifting rates, while others, such as New York and San Francisco, have seen spikes in shoplifting rates.
“Organized retail crime is definitely on the rise.”
Who is stealing? “Three categories,” says Lisa LeBruno, senior executive and her president of the Retail Industry Leaders Association. “There are opportunistic shoplifters, relentless repeat offenders, and organized retail criminal gangs (ORCs),” she says.
what is stolen? “It’s coveted,” said Mark Matthews, vice president of research and development and industry analysis at the National Retail Federation. “It stands for concealable, removable, usable, valuable, fun, disposable item.”
Companies were tight-lipped about the theft to scare Wall Street, their customers, and their employees. Not so much anymore.
Mike Combs, head of property protection, organized retail crime and central investigative teams at The Home Depot, said: “During the pandemic, a lot of people would have thought it could have gotten better, but it actually got worse.
Best Buy CEO Corie Barry said on the earnings call last November that the pressure from retail theft was appearing in the company’s finances, The Wall Street Journal reported.
Then there’s the comment from Rite Aid’s CFO this week, reported by Fox Business. The company said the closure of stores, partly due to excessive theft, was a factor.
Below is from a Target store in San Francisco by Brian Sozzi of Yahoo Finance.
“We take a multi-layered approach to combating organized retail crime,” Brian Harper-Tibaldo, Target’s senior manager of crisis communications, told Yahoo Finance. This includes in-store technology, training of store leaders and his members of security teams, and partnerships with local, state and federal law enforcement agencies and retail trade associations. ”
Why do people steal these days? That’s a big deal. In a way, it reflects our times. Simply put, America’s social contract is strained. Until recently, we were able to line up our goods. In many cases, they were able to stock huge, large stores with only a few employees. It’s a model that works when our social contract is strong, that is, when people are getting their fair share of shakes. Now it seems more people are stealing instead. (By the way, our stressful social contract may be limiting how far we can push this man-light, technology-heavy model. Last month, Wegman’s opened its scan and Exited the Go Shopping app.Why?Shrinking of course.)
I think wealth inequality has something to do with all this. Remember the so-called public enemy era of the 1930s? Bank robberies were rampant throughout the country. It also coincided with the Great Depression. Less money goes to the poor, more theft. It seems to me like cause and effect.
And some additional factors are exacerbating the situation, including the opioid crisis, workforce shortages, and the current inflation. More stealing can make things worse.
“This is a problem for all of us because it drives up prices for all of us,” says Mark Matthews of the National Retail Federation. “This is an industry with very low profit margins, often below 2%. So if you lose an item, the cost is passed on to the customer.”
Locking up merchandise also has its own downsides for retailers as it can reduce impulse purchases. If you have to wave to an employee to unlock a door, you might not be very inclined to get that Häagen-Dazs.
Does anyone benefit here? Online marketplaces benefit from consumers switching to e-commerce because shopping in locked stores can be tedious.
Who else benefits? Companies like Indyme, InVue, RTC and Vira Insight manufacture systems with clear plastic shelves, locks and buttons to summon employees. Also manufacturer of turnstiles, security cameras, mirrors and security guards. Business is booming here.
Yes, there are places in the US where you can deposit 12 eggs for $5 at a farm stand on the honor system, but elsewhere you have to ask the clerk to unlock a $5 tube of crest . Like many things in America these days, our social contract doesn’t seem to be well distributed.
This article was featured in the Saturday edition of Morning Brief on Saturday, October 1st. Your morning brief will be sent directly to your inbox by 6:30am ET every Monday through Friday. apply
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