America’s largest retailers say that organized retail crime has become a multibillion-dollar problem, but the effectiveness of their strategies to address it and the accuracy of their overall data have been called into question.
companies like the last few years Home Depot, Lowe, Walmart, Best Buy, Walgreens and CVS An alarm is being sounded about an organized group of thieves who rob stores and resell goods on online markets.
They have poured money into anti-theft strategies such as plastic boxes, metal detectors, motion-sensing monitors and AI-powered cameras, warning that consumers could pay the price if the problem is not addressed.
“Theft is a problem. It’s at historically high levels,” Walmart CEO Doug McMillon told CNBC in December. “If this is not corrected over time, prices will increase and/or stores will close.”
However, the issue is not as clear-cut as retailers and trade groups think.
Research from the National Retail Federation shows that retail sales will decline by $94.5 billion in 2021, up from $90.8 billion in 2020, but the data is mostly qualitative and cannot be fact-checked because it comes from an anonymous pool of retailers.
Additionally, the $94.5 billion loss represents a gross reduction, which is the difference between the inventory a company records on its balance sheet and what it can actually sell. This difference accounts for shoplifted items and also includes inventory that is damaged, lost, or stolen by employees.
According to the NRF, outdoor retail crime accounts for only 37% of these costs, or about $35 billion.
At least one major retailer recently admitted that it may have overblown the issue.
“Maybe we cried too much last year,” Walgreens Chief Financial Officer James Kehoe said in January when investors were asked about the shortfall. “We’ve stabilized,” he said, adding that the company is “very happy with where we are.”
However, law enforcement agencies and retailers said organized retail crime remains a problem and is behind their data.
“I can tell you that we know that crime is increasing in our world. We see it every day in our stores,” Scott Glenn, Home Depot’s vice president of asset protection, told CNBC. “Our internal information shows that it is growing at a double-digit rate on an annual basis.”
Watch the video for more information.
