Sam Amico
Rampant, organized shoplifting gangs surge have made Target their own target lately. In fact, it’s creating a major dilemma for the superstore, often viewed as Walmart’s more-polished cousin.
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How bad is it?
Well, really bad — as Target announced organized theft has taken about a whopping $400 million “bite out of its bottom line,” relayed Scott Norvell of the New York Sun.
That’s not all. Target CFO Michael Fiddelke said on an earnings call that “we expect it will reduce our gross margin by more than $600 million for the full year,” via Yahoo Finance.
Clearly, these organized theft rings are on the rise, and while Target has clearly been impacted, it is not alone. Rite Aid, Best Buy, Walmart and other big-box retailers.
Fiddelke said that there are “a handful of things that can drive shrink in our business and theft is certainly a key driver.”
Target Lost $400 MILLION This Year So Far Due to Shoplifting
Combatting theft is actually a fairly difficult process, Fiddelke added.
“We know we’re not alone across retail in seeing a trend that I think has gotten increasingly worse over the last 12 to 18 months,” he said. “So we’re taking the right actions in our stores to help curb that trend where we can, but that becomes an increasing headwind on our business and we know the business of others.”
Things have seemed particularly dire in New York City, where Target, Rite Aid, and the others seem to be hit the hardest.
“I think the headline here is the environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city,” Rite Aid chief retail officer Andre Persaud said.
Yahoo Finance editor-in-chief Andy Serwer took a stab at why theft is on the rise in a post earlier this year, when he wrote the following:
“Why are people stealing these days? That’s a tough one. To some degree it’s a reflection of our times. Simply put, America’s social contract is straining. Until recently we’ve been able to lay out goods—often in mammoth, big box stores with only a handful of employees. When our social contract is strong—i.e people are getting a fair shake—it’s a model that works. Now it seems more people are stealing instead.
“… I think wealth inequality has everything to do with all this. Think back to the so-called Public Enemies era in the 1930s, when bank robbers ran rampant across the land. That also coincided with the Great Depression. Less money in the hands of poor people and more stealing. Seems like cause and effect to me.”
