During the pandemic, major retailers have warned of a surge in theft and an increase in brazen shoplifting attempts. But top Walgreens executives say the freakout may have been exaggerated.
Walgreens finance chief James Kehoe admitted on Thursday’s earnings call that “maybe I cried too much last year” about product losses. misscanned items, lost merchandise due to other errors) decreased from 3.5% of total sales last year to about 2.5% in the most recent quarter.
Kehoe’s message is very different from comments made by Walgreens and other retailers such as Walmart and Target on thefts over the past three years.
Businesses and retail trade groups are calling on lawmakers to crack down on shoplifting and “organized retail crime” rings breaking windows and robbing shelves of aisles full of merchandise. There is. Incidents are certainly happening. Many political leaders and local and national news outlets, including CNN, have covered the viral burglary case.
So retailers took action. They started locking down more products like deodorants and toothpaste, added security guards, and even closed stores.
Last January, Walgreens (WBA) announced that its shrinkage had increased by more than 50% year-on-year. The company has blamed some of that surge on organized retail crime and will close five of his San Francisco-area locations in 2021, claiming the reason for the closures is theft.
“This is no petty theft,” Kehoe said last January. “These are gangs who actually break into stores and empty cosmetics. And it’s a real problem.”
But a year later, Mr. Kehoe said on Thursday that the company tightened security at its stores too much.
“Maybe we overdid it, so maybe we’ll back off a bit,” he said of security staff. , instead deploying more police and law enforcement officers.
Walgreens may have overstated the threat of shoplifting over the past few years, but it’s true that theft has always been a problem for retailers, and during times of recession and other economic hardships, people desperately Theft often spikes just when you might feel the need to do so. commit petty crimes to survive. In addition, recent factors such as store staff shortages and self-checkout have made it easier for thieves to steal.
The National Retail Federation estimates retailers’ downsizing costs will be $94.5 billion in 2021, up from $61.7 billion in 2019 before the pandemic. Shoplifting is often not reported to the police, but businesses say theft has worsened during the Covid crisis.
Target (TGT) CEO Brian Cornell said in November, “Like other retailers, we’ve seen a significant increase in theft and organized retail crime across our business.
Walmart (WMT) CEO Doug McMillon said on CNBC last month that “theft is a problem” and “more serious than ever.” He warned that the store could close if it continued.
However, it’s not clear if the numbers are summed.
For example, in 2021, the San Francisco Chronicle reported that data released by the San Francisco Police Department does not support Walgreens’ account of closing five stores due to systematic retail theft.
According to the paper, one of the closed stores had only seven shoplifting incidents reported in 2021, compared with a total of 23 since 2018. , there were an average of less than two recorded shoplifting incidents per month.
Similarly, a 2021 Los Angeles Times analysis of figures released by industry groups on losses from organized retail crime found that “there is reason to doubt that the problem is as big and pervasive as they say.” I understand.