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Target said Tuesday it is closing nine stores in urban areas in four states, citing increasing violence related to theft and organized retail crime.
Through October 21, three stores will be closed in Portland, Oregon, one in Seattle, one in New York and three in the San Francisco-Oakland area. Retail crime at these locations has reached levels that threaten safety and “business performance,” Target said.
“We know our stores play an important role in their communities, but we can only be successful when the work and shopping environment is safe for everyone,” the company said in a press release.
The company said some employees would have the opportunity to move to other branches.
Target has been vocal about its problems with theft and organized retail crime. Chief Executive Officer Brian Cornell said on a second-quarter earnings call last month that stores had seen a “120 percent increase in thefts involving force or threat of force” in the first five months of the year.
Target said in May that shrinkage – the reduction in inventory caused by something other than sales – caused losses of $500 million. However, CFO Michael Fiddelke did not provide any information about the extent to which this was due to external theft.
Shoplifting, organized crime and violence have become major problems for regional and national retailers. Home Depot, Lowe’s, Dollar Tree, Dick’s Sporting Goods and Ulta are among those that reported declines in recent earnings releases. Mounting losses have prompted giants like Walmart to also close locations.
A Washington DC grocery store removes Tide, Colgate and Advil to prevent theft
According to the National Retail Federation Security Survey, outside thefts accounted for an average of 36 percent of shrink-related losses in physical stores in 2022.
“The situation is getting worse,” said David Johnston, retail association vice president for asset protection and retail operations, in a news release Tuesday. “Beyond the financial impact of these crimes, violence and safety concerns continue to be a priority for all retailers, regardless of size or category.”
Overall, shrink cost retailers $112.1 billion in losses last year, up from $93.9 billion in 2021, the survey said. But more than half of those losses are due to employee theft and operational and processing errors, which accounted for 29 and 27 percent, respectively.
In recent months, stores across the country have fallen victim to flash mob robberies, after-hours break-ins and supply chain thefts. Target said it has made several changes to help combat theft and organized retail crime, including hiring more security team members, using third-party services, locking up certain merchandise and investing in training employees in protective measures and de-escalation techniques. The company also invested in technology updates to better detect and track cybercrime.
The company was also involved in the recently passed Inform Consumers Act, which went into effect in June and requires online marketplaces to report and verify information about high-volume third-party sellers.
Target has had problems this year that had nothing to do with theft. Several branches had problems Bomb threats and swatting incidents after participating in Pride Month.
Some retailers have taken different approaches to combating theft. To avoid closing an unprofitable store, regional grocery chain Giant Food is removing all national label products from its cosmetics and health shelves and introducing door checks. The company has already hired more security guards, closed side entrances and limited the number of items allowed through self-checkout areas.
Dollar Tree CEO Richard Dreiling said the retailer is taking “a very defensive approach to shrink.” 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.