Retailers Fight Theft, Organized Crime Targeting Stores

More retailers are increasing their efforts to fight a 26.5% increase in retail theft. The biggest challenges retailers face are keeping stores profitable and keeping their employees and customers safe, said Deborah Weinswig, CEO of retail research firm Coresight Research.

After Target estimated that inventory shrink, the industry term for missing inventory, would reduce profitability by $500 million, other retailers including Home Depot, Walmart, Dollar Tree, and Ulta Beauty also mentioned higher shrink in earnings calls.
The National Retail Federation estimates that shrink accounted for $94.5 billion in losses in 2021, driven by organized retail crime, up from $90.8 billion in 2020. Unlike ordinary shoplifters, ORC thieves often resell stolen merchandise at cheaper prices, often on third-party marketplaces.
Nearly 40% of retailers said they hired more loss-prevention employees in 2022, the NRF found. Others invested in theft-detection technology. Home Depot is spending more on machine learning and data analytics tools to identify at-risk regions or product categories.
Some retailers closed stores in areas with higher shrink. Others adopted what Dollar Tree CEO Richard Dreiling called “defensive merchandising,” encasing perfumes or razorblades in plastic boxes, tethering electronics to shelves, or locking items into clear drawers only employees can open.

What’s Next: Retailers and business industry groups support the Combating Organized Retail Crime Act, a bipartisan bill introduced last September, to help federal law enforcement prosecute organized retail crime groups and recover lost goods and proceeds.

—Sabrina Escobar and Janet H. Cho