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In the coming weeks, a massive D.C. grocery store will be stripping its beauty and health aisles of all national labels. No more Tide, Colgate or Advil, just store brands. Shoppers must also present their receipts to an employee before leaving the store.
It’s the regional supermarket chain’s most flagrant move to combat the rampant theft that plagues retailers of all sizes. It’s also a possible last-ditch effort to avoid closing the unprofitable Alabama Avenue store – the only major grocer east of the Anacostia River in District 8.
“We want to continue to be able to serve the community, but we cannot do so if we incur significant loss or risk to our employees today,” said Ira Kress, Giant’s president.
Shoplifting, organized crime and violence have become major problems for regional and national retailers. Home Depot, Target, Lowe’s, Dollar Tree, Dick’s Sporting Goods and Ulta are among those that pointed to shrinkage – the reduction in inventory caused by something other than sales – in their second-quarter earnings reports. Mounting losses have prompted giants like Walmart to close locations.
“Our team continues to face unacceptable levels of retail theft and organized retail crime,” Target CEO Brian Cornell told investors last month. “In the first five months of this year, our stores saw a 120 percent increase in thefts involving violence or threats of violence.”
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In recent months, stores across the country have fallen victim to flash mob robberies, after-hours break-ins and supply chain thefts. Several target locations had problems Bomb threats and swatting incidents related to participating in Pride Month.
Organized retail crime incidents increased an average of 26.5 percent in 2021, according to a National Retail Federation study released last year. Store owners, the report said, blamed organized retail crime for about half of the $94.5 billion lost to retail contraction this year.
That has led retailers like Dollar Tree to “take a very defensive approach to shrink,” said Chief Executive Richard Dreiling. The chain saw a 30 percent decline in gross profit margin last quarter, largely due to shrinkage. Now more items are locked up, moved behind the counters or simply taken out of stock.
In downtown Chicago, Walgreens opened a new anti-theft store with just two aisles of “low-value” products like Band-Aids, snacks and batteries, while the rest is kept behind a counter and must be ordered digitally.
Grocers like Giant have thin profit margins, so higher operating, labor and rental costs can create undue pressure. This has forced some retailers to close stores in major urban centers. Before closing its downtown San Francisco location, Whole Foods placed fliers on shelves encouraging customers to find a team member selling alcohol, nutritional supplements and other high-value goods such as: Manuka honey from behind, a former manager told the Washington Post.
(Whole Foods’ parent company, Amazon, was founded by Jeff Bezos, owner of The Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)
Giant Food, which has 165 supermarkets in D.C., Delaware, Maryland and Virginia, has not closed any stores. Several changes were made in May, including hiring more security guards, closing side entrances, limiting the number of items at the self-checkout, eliminating shelves with high-risk items and locking up more products.
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“In this particular business, it’s actually worse, not better,” Kress said of the psychiatrist. “And we have invested a lot of money here, even more security here than in any other store.”
This means that further changes are needed, said Kress. To curb losses, Giant’s Alabama Avenue store will soon remove heavily stolen items such as Tide laundry detergent, Schick razor blades, Dove soap, Degree deodorant and Pantene shampoo.
“We have no choice,” Diane Hicks, senior vice president of operations, said Thursday during a tour with officials from the D.C. mayor’s office, the Metropolitan Police and Fire departments and Chamber of Commerce. She added that other nearby stores have locked up or removed all of their products from those aisles. “I left it up to our customers and unfortunately all this crime does is force them to come to us.”
These products are easy to steal or have a higher resale value, Kress said. Instead, customers can purchase Giant’s CareOne private label brand, which has a low resale value.
“I don’t want to do that – I’d like to sell [those products]”,” he said. “But the reality is that Tide is not a profitable item in this store…In many cases, people have the product in stock and within two hours it runs out, so it doesn’t sit on the shelf anyway.”
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Some D.C. Council members have expressed concerns that Giant could close a store that serves a community of more than 85,000 people. A supermarket like Giant is not only an important part of the community, but also a lifeline for a community with limited access to quality food.
Theft and violence are a problem in the store’s area, said Lindsey Appiah, deputy mayor for public safety and justice, who was among the officers who toured the store Thursday. But access to a grocery store is “important for public health,” which is why her office plans to work with Giant to find solutions.
“One of the things we try to do is create thriving communities,” she said. “We definitely don’t want to lose a hub for this community and we don’t want people to suffer unnecessarily because of the actions of those who are the small minority that are causing so much of this disruption.”