Retail executives across the country are sounding the alarm on ever-increasing in-store shoplifting that is burning a multibillion-dollar hole in their balance sheets. Fighting back is not enough since many are essentially powerless to stop the problem.
Retail stores are struggling with increasing amounts of stock disappearing, or shrink in industry parlance, nearly doubling in cases on a quarter-on-quarter comparison.
“The increased attention is basically due to more large retailers calling out shrink as a real problem impacting both sales and margins,” Evercore ISI analyst Greg Melich.
Target Corp. reported lost or stolen inventory downing profitability by $500 million this year, while Ulta Beauty Inc. specifically blamed theft when it recently cut its full-year margin outlook.
Earlier this year, the National Retail Federation estimated that lost inventory cost retailers nearly $94.5 billion in 2021, up from $90.8 billion the prior year.
New York City, “the epicenter of the retail market” in the U.S. according to Mayor Eric Adams, saw a 45% increase in retail theft complaints in 2022.
In California, on the other hand, reports of shoplifting fell for the same period, although that may be have been partially driven by a new law decriminalizing thefts below $950 in value.
By Redd Brown/Bloomberg
