It’s been hard to get an exact read on the rise in retail theft. Best Buy sounded alarm bells back in November 2021 when it said thieves were traumatizing employees. Walgreens was vocal on the issue too, but then its chief financial officer James Kehohe did an about-face, telling analysts in January that the company may have overstated the issue and its impact on sales. “Maybe we cried too much last year,” he said on the January earnings calls.
But this quarter’s batch of retail earnings have brought the theft issue to the forefront again. Both Home Depot and Target cited rising retail theft.
“The country has a retail theft problem,” Home Depot CFO Richard McPhail said on a call with CNBC on Tuesday after its earnings. “We’re confident in our ability to mitigate and blunt that pressure, but that pressure certainly exists out there.”
Home Depot’s vice president of asset protection had told CNBC in March crime is increasing at double-digit rates.
Target said organized retail crime will reach $500 million more in stolen and lost merchandise this year compared with a year ago. On its earnings call, Target CEO Brian Cornell said retail theft is “a worsening trend that emerged last year.”
If the threat is moving in severity from one retailer to another, the industry remains convinced it has the numbers to say the crime trend is rising, and that this is not a shoplifting issue reflecting tougher economic times for Americans but increasingly the work of organized retail crime networks.
The National Retail Federation says organized retail crime is the main reason for retail “shrink” — a mismatch between actual inventory and what is on the books — which reached $94.5 billion in 2021, an increase of almost $4 billion year over year.
Its president Matt Shay told CNBC on Thursday that the issue isn’t going away. “Conversations we’ve had with members over the last several years indicate it is getting to be a really acute and serious problem,” and as far as the annual numbers,…
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