business news in context, analysis with attitude

CNBC reports that as Target released its quarterly numbers this week, it also pointed out a major drag on earnings - organized retail theft, which was $763 million in 2022 and is projected to be as much as $1 billion this year.

The story notes that "organized retail crime has become a hot-button issue in the industry, and some companies have blamed the growth of online marketplaces that allow thieves to anonymously sell electronics, makeup and other items they stole from stores. Home Depot, Walmart, Best Buy, Walgreens and CVS are among the major retailers that have spoken about the problem, saying that shrink has gotten worse."

CNBC quotes Target CEO Brian Cornell as saying that "the problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm’s way."  And, the story says, Cornell "called out the challenge on the company’s fiscal first-quarter earnings call, saying the retailer and others are grappling with rising theft on top of slower sales and more price-sensitive shoppers. He described retail theft as 'a worsening trend that emerged last year,' and said violent incidents have increased at Target’s stores."

More context from the story:

"Cornell said Target is trying to reduce theft by installing protective fixtures and adjusting assortment in some stores. He said the company is working with politicians, law enforcement and retail industry trade groups to come up with policy solutions … Cornell said the company is 'focused on keeping our stores open in the markets where problems are occurring.'  It has roughly 1,900 stores across the country, which are located in suburban areas and major cities including New York City and San Francisco."

KC's View:

I have no idea what the best solution to this problem is, except that it is critically important for retailers - and law enforcement - to have a no-tolerance approach even to the smallest infractions, lest they mushroom into far bigger problems.

"The line must be drawn here! This far, no further!" - Capt. Jean-Luc Picard