Target’s Chairman and CEO Brian Cornell announced the company will suffer an estimated $500 million in lost profits this year, citing organized retail theft as a primary factor.
Left unchecked, organized retail crime degrades the communities we call home. As we work to address this problem, the safety of our guests and our team members will always be our primary concern. Beyond safety concerns, worsening shrink rates are putting significant pressure on our financial results.
In 2022, the retail giant recorded a $700 million loss from inventory shrinkage, Yahoo Finance reported. This is calculated based on losses from organized retail crime, vendor fraud, and damaged or mismarked items. On average, retailers attribute 37% of shrinkage to external theft, including organized retail crime, the National Retail Federation Retailers saw a 26.5% increase in organized retail theft in 2021, according to the NRF.
In the previous year, eight of ten retailers reported seeing an increase in violent acts carried out during organized retail thefts, the NRF“The unfortunate fact is violent incidents are increasing at our stores and across the entire retail industry,” CornellYahoo Finance. “And when products are stolen, simply put they are no longer available for guests who depend on them.”by Breitbart, downtown San Francisco Target employees reportedly witness a theft “ten times a day.
With the rise in self checkouts and a dwindling number of employees in the store, experts consider this another factor in lost profits. “‘If you had a retail store where 50% of transactions were through self checkout, losses would be 77% higher than average,’ according to Adrian Beck, an emeritus professor at the University of Leicester in the UK who studies retail losses,”The majority of retailers, 68.5%, do not have an organized retail crime team put in place, the NRF
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