US retailers voice alarm at rising theft, 'flash rob' attacks

 

US retailers voice alarm at rising theft, 'flash rob' attacks

Toothpaste, chocolate, washing powder and deodorant -- everyday products are increasingly under lock and key at US retailers, as petty theft and organized shoplifting rise while consumers grapple with costs of living. Major retailers Walmart and Target, drugstore chains CVS and Walgreens, as well as home improvement firm Home Depot and footwear seller Foot Locker are among those to have voiced concern over more thefts -- including violent incidents -- in their latest earnings results.

"Organized retail crime, and theft in general, is an increasingly serious issue impacting many retailers," said Lauren Hobart, chief executive at Dick's Sporting Goods during a conference call. The impact of stealing on the company's inventory was "meaningful" on both its second quarter results and expectations for the balance of the year, she added. Dick's now expects earnings per share for the year at $11.33 to $12.13, down from earlier guidance of $12.90 to $13.80.

"During the first five months of this year, our stores saw a 120 percent increase in theft incidents involving violence or threats of violence," said Target chief executive Brian Cornell in a separate briefing. "Our team continues to face an unacceptable amount of retail theft and organized retail crime," he said. He noted a loss of inventory well above what is sustainable over the long term.

This comes as interest rates have surged from close to zero to around 5.5 percent over 18 months -- the highest level in 22 years -- as policymakers seek to curb inflation. Higher lending costs make it pricier to borrow funds for big ticket purchases, or for companies to expand their businesses -- and consumers have been feeling the squeeze. According to the National Retail Federation's 2022 retail security survey, retailers lost an estimated $94.5 billion nationwide to "shrink" in 2021 alone.

Retail shrink means the loss of inventory from factors including staff theft, shoplifting or administrative errors. The survey also noted that retailers on average saw a 26.5 percent rise in organized retail crime in 2021, with a majority of respondents reporting that the pandemic has led to an increase in risks.

As a result, stores have been installing transparent walls with locks on shelves, sometimes padlocked chains on refrigerators, and scattering call buttons in aisles for staff. Unprotected shelves are often sparsely stocked as well, to limit shoplifting. But such security measures are not always an effective deterrent. In June, a man in a hooded jacket and face mask used a blowtorch -- in full view of customers and employees -- to melt locked cases at a Walgreens outlet in Queens, New York. He then filled a bag with products and left without paying, according to media reports.

Residents in Queens have also launched a petition surrounding unsafe conditions in several CVS outlets. According to media reports, some retailers are asking their staff not to intervene in the event of theft and not to contact the police, for their own safety. Some are considering closing sites, with Giant mulling the closure of a Washington supermarket where theft and violence "is significant, and getting worse." It is becoming increasingly difficult to operate under these conditions, a spokesman told AFP, adding that other locations were also affected.

Walgreens closed five San Francisco stores in 2021 due to theft, while Walmart shuttered four Chicago outlets this year, officially due to a lack of profitability. "Shrink has increased a bit this year. It increased last year. It's uneven across the country," noted Walmart chief financial officer John Rainey in mid-August. "We don't want it to go up obviously because it could cause prices to rise," he added.

But online users are reporting more "flash rob" incidents where a group surges into a store, seizes items within reach and runs off. On August 12 in a Nordstrom store in Los Angeles, around 30 masked people stole more than $300,000 worth of luxury items and used bear spray on a security guard, according to the police.

American retailers are facing growing concerns that threaten both their profits and the safety of their employees and customers. An alarming rise in theft and flash rob attacks is causing growing unrest in the retail sector. In this article, we'll dive into the factors that contribute to this problem, its impact on retailers, and potential solutions.

Understanding the problem: In recent years, retailers across the United States have seen an alarming increase in theft. Shoplifting, organized retail crime and theft by employees are on the rise, with significant financial implications for businesses.

Flash Rob Attacks:

Flash rob attacks, also known as "smash and grab" incidents, involve large groups of individuals who quickly enter a store to steal merchandise and then quickly flee. These brazen thefts often leave retailers and law enforcement scrambling to respond effectively.

Impact on retailers:

The most immediate impact of the increasing theft and flash rob attacks is financial. Retailers lose billions of dollars each year to stolen goods. These losses can lead to higher prices for consumers and reduced retail jobs. Safety of employees and customers: The safety of employees and customers is paramount and these incidents can quickly escalate and potentially endanger the lives of innocent people. Retailers must ensure a safe shopping environment for everyone.

Factors contributing to the problem:

The COVID-19 pandemic has exacerbated this problem, as the economic downturn and increased desperation among some individuals has fueled theft rates. In addition, camouflage mandates provide cover for criminals, making it more difficult to identify and apprehend suspects.

Organized retail crime rings:

Highly organized crime groups target retailers. These groups are often involved in large-scale theft, making it difficult for law enforcement to track and apprehend all members.

Weak deterrents: Many retailers hesitate to take legal action against shoplifters for fear of negative publicity or potential confrontation. This perceived leniency can embolden criminals.

Invest in security measures:

Retailers must invest in robust security systems, including surveillance cameras, alarms and loss prevention teams. Visible security measures can act as a deterrent. Cooperation with law enforcement authorities: Retailers should work closely with local law enforcement to share information about crime and develop strategies to apprehend repeat offenders.

Retailers can engage in their communities to raise awareness of the impact of theft on local businesses and jobs. Building a strong community network can help deter potential criminals. Changes in legislation and policies: Push for legislation that toughens the penalties for organized retail crime and gives retailers more tools to effectively combat theft.

US retailers are facing a growing crisis with theft and flash rob attacks on the rise. The financial, security and psychological impacts on businesses, employees and customers are significant. However, through a combination of improved security measures, cooperation with law enforcement, community engagement and policy changes, retailers can take proactive steps to mitigate this alarming trend and protect their livelihoods and communities. In these uncertain times, it is crucial for retailers to remain vigilant and proactive in protecting their businesses and the well-being of all who depend on them.