Some US stores finding it increasingly difficult to operate with rising theft

One of the curious things I found about shopping in stores in and around Washington when I first arrived was the number of products held behind glass cases.

Alongside the aisles of the usual items which shoppers could put directly into their trolleys or baskets, some – seemingly almost randomly - were off-limits.

It wasn’t that these were high-end goods. Not fine wines, expensive spirits or electronics – although they were also likely under lock and key.

Rather they were more mundane products such as deodorant, body wash and shaving blades. To access these, the shopper had to attract the attention of a store worker to open the glass case.

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This all formed part of corporate efforts to discourage shoplifting.

And it appears that shop owners believe the problem of theft is getting worse.

Already, in stores that owners consider to be at high risk of shoplifting, there can be cameras at each aisle as well as at the entrance and exits. Armed security personnel are not unknown.

But even more radical solutions are being examined.

It emerged this week that one supermarket, operated by the regional grocery chain Giant in Washington DC, will begin removing national label health and beauty products from its shelves. These national products will be replaced when possible with own-brand goods. Shoppers will also have to present receipts of purchase as they leave.

The Washington Post reported that the moves being put in place by Giant represented a “potential last-ditch effort to avoid shutting down the unprofitable store on Alabama Avenue”.

This generated concern among local residents who argued that the outlet was used to buy anything from soft drinks to their full weekly shopping.

But it is not only on the streets around southeast Washington DC that the fallout from shoplifting is causing concern. It is also a matter of worry about 370km away on Wall Street in New York.

To be more precise, what is bothering Wall St is what is technically known as “shrink” in the trade.

The term “shrink” can cover goods that have been damaged or stock that has expired. However, theft represents a considerable element.

Companies such as Target, Walmart, Dollar General and Home Depot have all raised flags about the financial impact of retail theft in recent months.

Figures drawn up by the media company Bloomberg earlier this year revealed that retailers had raised the impact of the “shrink” problem in about 200 earnings calls – effectively doubling quarter on quarter.

What was of concern to retailers was not so much small scale pilfering in their stores but rather what is known as organised retail crime. This is essentially considered to be professional, large-scale theft conducted by criminals as a business, with the stolen goods being resold on the black market.

And the financial figures put forward by the industry for losses are staggering. In May the retailer Target warned theft and organised retail crime could reduce this year’s profitability by more than $500 million. This would be in addition to the $650 million in losses it incurred in 2022.

Last month Target executives told analysts that while there were indications that the rate of losses may be reaching a plateau, they had not seen any evidence of a downward trend. It said the company would not be changing its $500 million inventory-loss forecast for the year.

Target chief executive Brian Cornell said threats and thefts involving violence at stores jumped 120 per cent in the first five months of the year. He described it as a trend that was “moving in the wrong direction”.

The Ulta Beauty company said the rise in violence and aggressive behaviour during organised retail crime thefts was concerning. It said theft put “a pretty meaningful drag on our financial performance and will remain a challenge for the rest of the year”.

Back outside the Giant supermarket in southeast Washington, local council member Trayon White told local TV that people taking from the store were really “taking from yourselves”.

“We know the price of food has sky rocketed in the last three years but we cannot afford to hurt ourselves by constantly taking from the store because that means everyone is going to be without a place to eat.”

Giant said it did not have plans to close the outlet but that the reality was that the incidence of theft and violence at the store was significant and getting worse. It said it was becoming increasingly more difficult to operate under those circumstances.