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The holiday shopping season is coming amid a wave of organized retail crime, with some officials recently warning about the issue.

The National Retail Federation found in 2022 National Retail Safety Survey Total losses from shrinkage – the term retailers often use to account for theft and other types of inventory losses – rose roughly 4%, to $94.5 billion in 2021. shrinkage losses “were primarily driven by external theft, with the theft attributed to ORC [organized retail crime]”said the report released in mid-September.


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ORC incidents increased an average of 26.5% in 2021, with 81.2% of retailers reporting “somewhat” or “a lot” of ORC-related aggression and violence year-over-year, according to the survey.

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During Target’s third-quarter earnings call in mid-November, CFO Michael Fidelke said that one factor affecting Target’s gross margin is “inventory depletion, or shrinking, which is a growing problem facing all retailers.” “

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“On target, year over year, the incremental reduction has already reduced our gross margin by more than $400 million versus last year, and we expect to reduce our gross margin by more than $600 million for the full year. do,” he said. “This is an industry-wide problem that is often driven by criminal networks, and we are collaborating with many stakeholders to find an industry-wide solution.”

The company’s CEO, Brian Cornell, similarly described the theft as an industry-wide “growing financial headwind” on the call.

“Along with other retailers, we have seen an increase in theft and organized retail crime in our business,” he continued. “As a result, we are making significant investments in training and technology that can prevent theft and keep our guests and store team members safe.”

Roughly a month and a half ago, Rite Aid officials cited shrinkage as a problem the pharmacy chain is tackling. His comments came during Rite Aid’s September quarter earnings call.

rite aid

Hayward Donigan, who has served as Rite Aid’s CEO since 2019, said the pharmacy chain experienced “unexpected headwinds” from shrinking, “particularly in our New York Urban stores.” The company’s front-end gross profit was “affected by a $5 million increase in shrinkage,” according to CFO Matt Schroeder.

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Meanwhile, chief retail officer Andre Persaud said at the time that “the headline here is the environment we operate in, especially in New York City, based on everything you read and see on social media and the news.” But not conducive to reducing shrinkage. In the city.”

He said that Rite Aid was making progress on “improving our product protection, improving our organized retail customer program” and that the company’s goal was to “stay in the communities”.

Persaud said in September that in addition to considering pharmacy-only and pharmacy prescription-only formats and placing off-duty law enforcement officers at some stores, Rite Aid was “trying to put everything behind the showcase” in some areas. Is”.

Retailers have previously raised concerns about organized retail crime. The heads of several retailers, including Best Buy, Dollar General and Kroger, sent a letter to House and Senate leaders last December noting “the growing impact organized retail crime is having on the communities we proudly serve” and Express concern about support for this. Integrity, Notification and Fairness in Online Retail Marketplaces for Consumers Act.

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“Retail establishments of all types have seen a significant increase in organized crime in communities across the country,” officials wrote, “While we continue to invest in people, policies and innovative technology to prevent piracy, criminals are taking advantage of the anonymity of the Internet and the failure of some marketplaces to verify their sellers.”

anchorSecurityThe lastChangeChange %
TGTtarget corp163.39+5.52+3.50%
RedRite Aid Corp5.29+0.02+0.38%
bbyBest Buy Company Inc.82.39+2.52+3.16%
dgDollar General Corp.256.44-1.09-0.42%
KRKroger Company47.84-0.23-0.48%

“This trend has made retail businesses the target of increased theft, hurt legitimate businesses that are forced to compete against unscrupulous sellers, and greatly increased consumer exposure to unsafe and dangerous counterfeit products.”

Ken Martin contributed to this report.