O:8:"stdClass":12:{s:7:"version";s:4:"1.11";s:10:"identifier";s:12:"post-1046452";s:8:"language";s:5:"en-US";s:5:"title";s:80:"Retail shoplifting is costing billions; CEOs worry they are powerless to stop it";s:13:"documentStyle";O:8:"stdClass":1:{s:15:"backgroundColor";s:7:"#fafafa";}s:6:"layout";O:8:"stdClass":4:{s:7:"columns";i:7;s:5:"width";i:1024;s:6:"margin";i:100;s:6:"gutter";i:20;}s:10:"components";a:2:{i:0;O:8:"stdClass":4:{s:4:"role";s:6:"header";s:6:"layout";s:17:"headerPhotoLayout";s:10:"components";a:1:{i:0;O:8:"stdClass":3:{s:4:"role";s:5:"photo";s:6:"layout";s:17:"headerPhotoLayout";s:3:"URL";s:36:"bundle://shutterstock_2315104933.jpg";}}s:8:"behavior";O:8:"stdClass":2:{s:4:"type";s:8:"parallax";s:6:"factor";d:0.8;}}i:1;O:8:"stdClass":4:{s:4:"role";s:9:"container";s:6:"layout";O:8:"stdClass":3:{s:10:"columnSpan";i:7;s:11:"columnStart";i:0;s:20:"ignoreDocumentMargin";b:1;}s:5:"style";O:8:"stdClass":1:{s:15:"backgroundColor";s:7:"#fafafa";}s:10:"components";a:21:{i:0;O:8:"stdClass":5:{s:4:"role";s:5:"title";s:4:"text";s:80:"Retail shoplifting is costing billions; CEOs worry they are powerless to stop it";s:6:"format";s:4:"html";s:9:"textStyle";s:13:"default-title";s:6:"layout";s:12:"title-layout";}i:1;O:8:"stdClass":5:{s:4:"role";s:6:"byline";s:4:"text";s:42:"By Bloomberg News | Jun 12, 2023 | 6:00 AM";s:6:"format";s:4:"html";s:9:"textStyle";s:14:"default-byline";s:6:"layout";s:13:"byline-layout";}i:2;O:8:"stdClass":5:{s:4:"role";s:4:"body";s:4:"text";s:263:"

Retail executives are sounding the alarm on in-store shoplifting as theft burns a multibillion dollar hole in their balance sheets. While most are vowing to fight back, they’re also expressing fears that they may be largely powerless to stop the problem.

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As if a possible recession and declining consumer sentiment wasn’t enough to worry about, retail executives are struggling with increasing amounts of stock disappearing, or shrink in industry parlance. The problem was talked about more on retailer’s earnings calls this quarter than any quarter on record, according to transcript data compiled by Bloomberg. The nearly 200 mentions mark a quarter-on-quarter doubling.

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“The increased attention is basically due to more large retailers calling out shrink as a real problem impacting both sales and margins,” Evercore ISI analyst Greg Melich said in an interview. Shrink can also refer to things like damage and expired stock, but theft is the main component.

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“Shrink levels are increasing for almost all retailers, Michael Relich told Digital Commerce 360. Relich is co-CEO of apparel brand Pacific Sunwear of California Inc., better known as PacSun.

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The shoplifting losses are beginning to reach staggering levels. Target Corp. said lost or stolen inventory will hurt profitability by $500 million this year,

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Target ranks No. 5 in the Top 1000 database, Digital Commerce 360’s ranking of the largest North American online retailers by web sales. PacSun is No. 239.

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And it’s not just inventory costs at stake. If retail theft worsens it could start to deter shoppers from brick-and-mortar stores and shift consumption online, where margins are often lower, Melich said.

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Earlier this year, the National Retail Federation calculated that lost inventory cost retailers nearly $94.5 billion in 2021, up from $90.8 billion the prior year.

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The prevalence of online marketplaces and the ease at which they allow thieves to sell stolen goods are partly to blame for the increase in retail theft, Melich said. They have helped proliferate a de facto industry out of criminal shoplifters, he said.

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Retailers are fighting back with various tactics from locking merchandise behind plastic windows to even exploring speed-limiters on shopping carts. But many say they are largely powerless. Walmart Inc., the world’s largest retailer, said although it’s “actively managing” the problem, it believes only law enforcement can provide a lasting solution.

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That assertion is hard to prove, however, as conclusive data is difficult to come by. Violent crime overall was on the rise in the U.S. prior to the pandemic. But property crimes had been steadily declining over that period, according to data from the Federal Bureau of Investigation. Some studies suggest the pandemic brought about a spike in street crime.

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And while New York City, “the epicenter of the retail market” in the U.S. according to Mayor Eric Adams, saw a 45% increase in retail theft complaints in 2022, reports of shoplifting fell in California. However, that may be have been partially driven by a new law decriminalizing thefts below $950 in value.

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Growth in media coverage of crime may also be contributing to the increase in executives talking about shrink. News stories that mention theft have steadily increased since the start of the pandemic. They reached a peak in May, according to a search of about 150,000 online sources by Bloomberg.

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Whatever the cause, it remains to be seen how much control retailers have. TJX Co. chief financial officer John Klinger said he is “laser focused” on fighting theft, but he isn’t expecting any improvement in shrink losses this year.

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Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

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Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

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Retail shoplifting is costing billions; CEOs worry they are powerless to stop it

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