Store closures due to theft is a growing problem in the United States. In 2021, according to New York News Today, retailers lost a combined $94.5 billion to shrink, a term used to describe theft and other types of inventory loss. This was a 62 percent increase from 2019 and the highest level on record.
Shoplifting contributes to store closers. But other factors such as employee theft and organized retail crime also play a role. Organized retail crime is when criminals work together to steal large quantities of merchandise from retailers. This type of crime is becoming increasingly sophisticated and challenging to prevent.
Theft can have a devastating impact on retailers, large and small. Many retailers are forced to close their doors after experiencing significant losses due to theft.
Examples of recent store closures due to theft:
- Walmart: In 2022, Walmart closed four stores in Chicago due to theft. This was just weeks after the company closed its only stores in Portland, Oregon.
- Walgreens: In 2021, Walgreens closed five stores in San Francisco due to theft.
- Target: In 2023, Target announced it would close nine stores in major cities across four states due to theft.
- Best Buy: In 2022, Best Buy announced that it would close more than 20 stores due to theft.
There are several things that retailers can do to help prevent theft, according to this video by Mike Keenan, a retail loss protection expert and a member of the TAL Global team. Among his suggestions are the following:
Closed-circuit cameras are designed to queue in to just about every corner of a store. CCTV systems not only keep their eyes on shoplifters, but they are also just as helpful in uncovering internal theft by store employees as well.
Radio frequency identification systems can track merchandise being walked out the door. A state-of-the-art RFID system should now be considered a requirement for all retailers.
Retailers are advised to conduct random merchandise audits. Merchandise audits are not only on the lookout for retail shrink but are also one of the best ways to determine how well a store is doing, what is selling, and what is not selling.
CCTV cameras cannot see everything. Store employees must fill in the gap and be trained to identify shoplifters. For instance, while there are undoubtedly many “lone wolf” shoplifters, most work in groups of two to five people at a time. Instead of discreetly placing a stolen piece of merchandise in a purse or a pocket, shoplifters often enter stores carrying large shopping bags. They are in the store for a reason —to shoplift—and want to ensure they have a place to put all they plan to take.
Employees trained to identify shoplifters learn about these and many other techniques shoplifters often use. This can prove incredibly useful in eliminating retail shrink.
Security and Risk Assessments
While these two types of assessments differ, they share the same goal: They examine stores and other facilities, looking for vulnerabilities that could allow people or property to be harmed and suggest ways to minimize or eliminate them in a systematic and prioritized way. These are conducted by professionals in the security industry.
The Impact of Store Closures on Consumers
We should remember the impact of store closers on consumers and entire neighborhoods. When a large grocery store chain opened a location in a problematic area of Chicago, local news outlets interviewed people in the area that were thrilled about this. Most commented that they had not had a grocery store in their neighborhood for decades.
However, after two years, the chain decided to close the store. The primary reason: thefts. Now, this entire area of Chicago is back to where it has been for decades.
When a store closes, consumers may have to travel further to find the products and services they need. This can be a challenge for people who do not have reliable transportation. Additionally, store closures can lead to job losses, further hurting the neighborhood economy.
Fortunately, there are ways to prevent store closures, reduce shoplifting, and retail store theft. TAL Global can show you how.