There was just one problem with Target's explanation for closing stores: the locations where the company closed generally had fewer crimes reported than other locations the company planned to keep open nearby, as a months-long CNBC investigation revealed.
CNBC's findings cast doubt on Target's statement and raise questions about whether the company's announcement was intended to advance its legislative agenda – cracking down on organized retail crime – and conceal the stores' poor financial performance while the company is struggling with declining sales.
In some cases, Target chose to continue operating stores in busier areas that had more foot traffic or higher average incomes, even though those locations experienced more thefts and violence, the investigation found. In these areas, police departments may be better funded due to higher tax bases, and shoppers may be able to spend more on necessities.
Many of Target's closed locations were “small-format” stores that the company opened over the past five years as part of an experiment to expand its presence in densely populated urban areas. The moves followed Target's decision to close four similar stores in the spring that it said were underperforming, Retail Dive previously reported.
When Target announced the closure of nine stores in September, Target said: “We cannot continue to operate these stores because theft and organized retail crime threaten the safety of our team and guests and contribute to unsustainable business performance.” We can only be successful if the working and shopping environment is safe for everyone.”
The news came just hours after the National Retail Federation released a key annual retail safety survey — which said violence in stores had increased but losses from theft had not changed significantly — and exactly a month before the trade group planned to lobby Congress for tougher penalties for organized theft. Target CEO Brian Cornell sits on the NRF Board of Directors and is a member of the Executive Committee.
A longtime retail executive and expert questioned whether Target's claims of in-store theft were intended to mask the company's problems as the retailer's sales fell year-over-year in both the second and third quarters.
“I don't want to use the word 'stunt' because I don't know exactly what happened in Minneapolis [where Target is based]”But to me it seemed like a ploy to divert attention from the company's overall underperformance,” said Mark Cohen, a professor and director of retail studies at Columbia Business School who previously served as CEO of Sears Canada, Bradlees and Lazarus department stores.
“They have not disclosed their actual shortage statistics,” he added. “They talked about it in general terms; they did not disclose other factors that led them to the decision to close any of these stores. They have implied that the only reason they closed the stores was theft. That may or may not be true. My guess is: Not true.”
In response, Target spokesman Jim Joice told CNBC that as a growth company, Target “continuously opens new stores, initiates remodels, invests in our team and infrastructure, and refines our operations as we seek to give people the shopping experience they want “We’re used to expecting from Target.”
“In 2023 alone, we opened 21 new stores and remodeled 150 stores as part of our nearly $5 billion investment in strategic initiatives. The recently announced store closures related to security, retail theft and unsustainable business performance represent less than 0.5% of our U.S. business volume.” “Our footprint is large with 1,956 stores currently operating and serving our guests,” said Joice .
Target buyers are encouraged to ask for help accessing products stored in locked boxes.
Gabrielle Fonrouge
CNBC used public records requests and law enforcement sources to obtain crime statistics and emergency call data for 21 Target stores in New York City, Seattle, the San Francisco Bay Area and Portland, Oregon – the four areas where the retailer has closed stores receive. The data includes the nine stores that Target closed and similar nearby locations that the company had open from January 2021 to September 2023, when the closures were announced. The records show how often Target was listed as a victim of a crime at the locations, or how often police called to the stores and arrested someone, said they had taken care of the problem, or provided a report or log of the incident created.
The records paint a frightening picture of the high levels of crime in the locations. But they also show a clear trend. Almost every store the retailer closed saw fewer police calls and fewer reports Crime incidents than the places that were kept open nearby.
Only one of the nine stores Target closed across the four regions, a location in Pittsburg, California, had more crime and police activity than the nearest comparable location in Antioch, California, according to CNBC's analysis.
Store-specific crime data for the nine locations where Target closed has not yet been reported.
Like most data on theft, organized retail crime and retailer “shrink,” or inventory losses, the records obtained by CNBC are incomplete. Theft and crime overall are difficult to measure because they often go unreported and undetected, experts told CNBC.
Target declined to provide its internal crime numbers. Without those numbers, records obtained by CNBC are “the only picture you're going to get” of what crime looked like at the locations the retailer closed and those it didn't, Christopher Herrmann said. Assistant Professor at John University Jay College of Criminal Justice and expert in crime analysis and mapping.
“It's interesting that they're using public safety or employee safety as an excuse to close the stores,” Herrmann said. “Because the reality is they’re not closing the stores with the highest rates of retail theft.”
In response, Target's Joice told CNBC that “incidents at the store level can vary widely in severity, and police data does not show the full extent of what our teams are experiencing on the ground.”
“We have repeatedly shared financial data and internal data about the increase in theft crime,” Joice said. “We have also consistently expressed our focus on security and highlighted team member experiences that illustrate the impact of theft and organized retail crime on our company, our guests and the communities we serve.”
“We continue to invest heavily in security, including strategies to prevent and combat theft and organized retail crime in our stores, and work with law enforcement, lawmakers and retail colleagues to find long-term solutions,” Joice said.
Target closed three stores in the San Francisco Bay Area – one in San Francisco, one in Oakland and one in Pittsburg, a suburb about 40 miles outside the city.
All locations were within a few miles or a short drive of another destination that remained open, which may have played a role in the company's decision to close them, experts said.
Retailers often “misjudge how much the new store will cannibalize existing stores,” said Cohen of Columbia Business School.
Target opened its now-closed small format store in Oakland in 2019, just two miles from its Emeryville location. Between January 2021 and September 2023, 96 crimes were reported at the Oakland branch, compared to 440 at the Emeryville branch during the same period.
Target's Emeryville, California, location remains open, about two miles from a store the retailer closed in Oakland.
Gabrielle Fonrouge
The results reflect some general theft trends in Oakland and Emeryville in 2023. Total thefts (excluding car theft) in Oakland fell 15% from Jan. 1 to Oct. 29, compared to the same period a year ago, police records show. In Emeryville, petty theft and grand theft rose 16% and 14%, respectively, from Jan. 1 to Oct. 31 compared to the same period last year, police records show.
Demographics is another factor that could play a role. In the ZIP code where the Oakland store is located, the median income level is $76,953, compared to $114,286 in Emeryville, according to U.S. Census data.
People with higher incomes tend to have more money for consumer goods. Police departments in these areas may also be more inclined to prosecute property crimes like theft when there are fewer violent crimes, which could explain the different police responses between stores, experts who study crime told CNBC. For example, one murder and three rapes have been reported in Emeryville so far this year. In comparison, Oakland had 106 murders and 159 rapes reported during the same period.
Looters rob a Target store on May 30, 2020, during protests in Oakland, California over the death of George Floyd.
Josh Edelson | AFP | Getty Images
At least 84 crimes that led to police reports occurred between January 2021 and September 2023 at the convenience store closed by Target on Folsom Street in the city of San Francisco.
Two miles away, 486 incidents were recorded during the same period at Target's sprawling Union Square location, which remains open.
The surroundings of the shops and the foot traffic also set them apart from the others.
The Target sign from its Mission Street store in San Francisco's Union Square glows on a building across the street, November 2023.
Gabrielle Fonrouge
The shuttered store was sandwiched between a car dealership and a highway in an area that locals said had little foot traffic and that had attracted a homeless encampment during the Covid pandemic. By comparison, Target's Union Square location is in the heart of San Francisco's bustling tourist and shopping district.
Target closed three stores in the city of Portland that had lower levels of crime than the locations that were open.
For example, at the Target on Southeast Washington Street, which remains open, 718 incidents were reported between January 2021 and the end of September 2023, which is more than all three closed stores combined recorded in the same period, according to police records.
One of the locations, a small-format store on Northeast Halsey Street, was open for less than three years before closing.
Based on available data in Portland, CNBC's findings reflect some regional crime statistics.
In the Hazelwood neighborhood, where the Target store on Southeast Washington Street remains open, reported thefts increased 5% in 2023 between Jan. 1 and the end of October compared to the same period last year. In Hollywood and Richmond, where Target closed stores, reported thefts fell 37% and 8%, respectively, during the same period.
However, in downtown Portland, where Target's Southwest Morrison Street store was closed, reported thefts rose 13% during the period.
Target closed two stores in Seattle, both small-format locations that had lower crime rates than the nearest Target stores.
For example, between January 2021 and the end of September 2023, 235 and 395 incidents were reported at the closed Targets on Northwest Market Street and University Way Northeast, respectively. At Northeast Northgate Way, 878 and 901 incidents were reported, respectively, during the same period.
The data also partially corresponds to local crime statistics. Between January 1, 2021 and October 31, 2023, reported thefts were 30% lower in the area of Target's Northwest Market Street location and 33% lower in the area of the University Way store, both of which were closed Area where Target's Northeast Northgate Way store remains open.
Target has closed a store in New York City. The location was in East Harlem and was in a larger shopping complex on the East River, about a 15-minute walk from the nearest subway station.
At least 844 incidents were recorded between January 2021 and the end of September 2023, but the numbers pale in comparison to those during the same period at other Target stores across the Big Apple.
At a store on Greenwich Street in Lower Manhattan, 2,090 incidents were reported, more than double the number reported in East Harlem during that period. Elsewhere, on Grand Street, 1,628 incidents were recorded.
The locations are very different. The two Lower Manhattan locations are in busier areas with more foot traffic and higher average incomes. In the ZIP code where the East Harlem store was located, the median income is $36,989, compared to more than $250,000 in the area around the Greenwich Street store and $43,362 in the area around the Grand Street location, U.S. Census data shows.
Target closed the East Harlem location — for crime and safety reasons, it said — while also planning to open a store about a mile and a half away on West 125th Street in Harlem. According to police, the crime rate is even worse in the area where the new store will open.
Target's New York store in East Harlem was housed in a larger shopping complex.
Gabrielle Fonrouge
That's when Target East Harlem announced Following the closure, reported petty thefts decreased 2.5% between January 1 and September 24, 2023 in the area where the East Harlem store was located and increased over the same period in the area where the Planned business is expected to rise by 9% in the same period a year ago. Target did not comment on the discrepancy.
Methodology: When analyzing 911 call logs and other crime data for this report, CNBC only considered incidents that resulted in an arrest, a police report or log, or incidents that police say they responded to and handled. Unfounded complaints, duplicate calls, requests for assistance, and business and benefits checks were culled from the logs and not counted along with other irrelevant information. Mental health crises, overdoses, vehicle thefts, vehicle break-ins and other events that were not directly related to Target or appeared to occur off-premises were also not included.
— Graphics by CNBC's Gabriel Cortes