Target just announced it is closing nine stores across the U.S., including one in New York City, because of theft and organized crime. They’re not the only national chain to get hit. Other Big Box stores are reporting problems, and the market research firm NPD Group says losses like this cost retailers $112.1 billion in 2022, up from $93.9 billion in 2021.
Marcum has been hearing about this problem from our clients, too. Retailers are having trouble meeting their sales projections, and in Los Angeles, some have told us they are afraid of being vandalized by gangs running the streets and committing smash-and-grab attacks.
Some commentators say the retailers are making too much of the problem, but from my standpoint, it’s serious. Although retailers carry insurance to protect themselves from losses, that’s not all that’s at stake when shoplifting is committed.
Human beings are working in the stores that are being invaded, and because of these crimes, many hardworking team members are coming to work in fear. While retailers will generally tell staffers not to try to intercede in a crime being committed in their stores and to seek help from law enforcement, how much comfort is that to someone when a smash-and-grab attack is taking place, or a shoplifter is exiting with a giant haul, not even trying to hide their crime? There is already a labor shortage in retail, and this situation is not going to make it easier to find and keep employees, no matter how loyal they are. That’s not to mention the effect on innocent customers who happen to go shopping at the wrong time.
Store closures can devastate a community, particularly if the stores are in retail deserts. The loss of a local store can mean residents who don’t own cars cannot easily pick up groceries and other things they need. It can also mean a loss of convenient local jobs.
My hope is that with this recent announcement from Target, we’ll see more local officials connecting with retailers to try to solve this. Shoplifting may not seem like a serious problem, but our laws have to mean something. What is the point of saying shoplifting is illegal if criminals can just walk into a store and grab what they want with little fear of consequences? It’s only going to lead to more lawlessness.
At Marcum, we are helping many retailers address this problem from a financial standpoint, but that really isn’t enough. Metropolitan areas that want to keep retailers need to get serious and find more creative, tech-enabled solutions to prevent in-store thefts. Retailers, in turn, need to come together to share best practices for stopping criminal activity.
The holidays are just around the corner, and many stores are already announcing plans for Black Friday. Holiday shopping makes the season fun for many of us, and I hope the day will never come when we have to do all of our shopping online for safety reasons—or because so many stores have closed. Shoplifting is a solvable problem. Leaders need to come together to tackle it before it becomes even more of an issue than it already is.