America’s biggest retailers say organized retail crime has grown right into a multibillion-dollar problem, however the effectiveness of their strategies to resolve it and the validity of the info overall have come into query.
During the last several years, corporations resembling Home Depot, Lowe’s, Walmart, Best Buy, Walgreens and CVS have been sounding the alarm about organized bands of thieves who ransack their stores and resell the products on online marketplaces.
They’ve poured money into theft prevention strategies, resembling plastic cases, metal detectors, motion-sensing monitors and AI-powered cameras, and have warned if the issue doesn’t improve, consumers could find yourself paying the worth.
“Theft is a problem. It’s higher than what it’s historically been,” Walmart CEO Doug McMillon told CNBC in December. “If that is not corrected over time, prices shall be higher, and/or stores will close.”
Nonetheless, the issue is not as clear-cut as retailers and trade groups have made it seem.
Studies from the National Retail Federation show retail shrink cost retailers $94.5 billion in 2021, up from $90.8 billion in 2020, but the info is basically qualitative and can’t be fact-checked since it’s gathered from an anonymized set of outlets.
Plus, the $94.5 billion in losses refers to shrink overall, meaning the difference between the inventory an organization records on its balance sheet and what it could actually sell. That difference accounts for items that were shoplifted but additionally includes inventory that was damaged, lost or stolen by employees.
External retail crime accounts for less than 37% of those losses, or about $35 billion, the NRF data shows.
Not less than one major retailer recently conceded that it can have overblown the issue.
“Possibly we cried an excessive amount of last 12 months,” Walgreens Chief Financial Officer James Kehoe said on an investor call in January when asked about shrink. “We’re stabilized,” he added, saying the corporate is “quite pleased with where we’re.”
Still, law enforcement agencies and retailers insist organized retail crime stays a problem and said they stand behind their data.
“I can inform you that in our world, we all know that crime is increasing. We see it every single day in our stores,” Scott Glenn, Home Depot’s vice chairman of asset protection, told CNBC. “Our internal information shows us that that is on a year-over-year basis, growing at double-digit rates.”
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