Retail theft has severe consequences for the community.
Mayhem on Main Street: The Hidden Costs of Retail Theft
A nationwide retail theft epidemic has wreaked havoc on the United States, resulting in a staggering loss of nearly $100 billion in 2021 alone. The consequences are far-reaching, with stores forced to raise prices or close their doors, insurers refusing to provide assistance, and small businesses left struggling to survive. In this captivating series, Mayhem on Main Street, the Washington Examiner delves deep into the causes of this shoplifting scourge, exploring the role of cartels, the impact on both large and small stores, and the complicity of lenient prosecutors. Part 5 of this series focuses on the ripple effects of retail theft on communities. To catch up on parts 1, 2, 3, and 4, click here, here, here, and here.
The Hidden Consequences of Organized Retail Theft
Organized retail theft not only eats into the profits of major brands but also has a profound impact on the shopping experience and the broader community in various indirect ways.
“Shoppers are now seeing everyday items like toothpaste and dish soap behind lock and key. Retailers know it is an inconvenience for customers,” the National Retail Foundation said in a statement to Congress this year. “The anti-theft security measures can lead to lost sales from customers who must wait for an employee to unlock a cabinet so they can access a product.”
Headline-grabbing videos of masked individuals swiftly looting store shelves and making a clean getaway have highlighted the immediate financial losses faced by retailers due to increasingly sophisticated organized retail theft rings.
The Domino Effect of Store Closures
Big-box stores have been forced to close their doors in high-crime areas due to organized retail theft, making it impossible to sustain operations. Unfortunately, the closure of flagship stores often seals the fate of surrounding small businesses.
Crime is partly to blame. Last month, in the nearby San Francisco Centre mall, Nordstrom closed its flagship location in the city, joining other retailers that have fled the effects of theft and overall crime levels and leaving a gaping hole in the already-struggling mall.
For instance, in San Francisco’s Union Square, the departure of a few well-known retailers triggered a mass exodus, resulting in the closure of nearly half of the complex’s stores since 2019. When major retailers abandon shopping complexes due to retail theft and crime, the decrease in foot traffic further exacerbates the challenges faced by the remaining stores.
The Rise of Online Shopping
Even before the pandemic, online shopping was gaining popularity. However, organized retail theft has pushed more shoppers away from physical stores and towards e-commerce platforms.
One of the indirect effects of retail theft is the implementation of anti-theft measures, such as locking up commonly stolen items. This inconvenience has driven more customers to shop online, where they can easily find the products they need.
Staff Shortages and Decreased Morale
Retail theft has not only impacted profits but has also driven many workers away from the industry, exacerbating the crime problem.
Surveys show retail workers report feeling less satisfied and safe on the job as crime becomes a more regular occurrence in many of their workplaces.
During the pandemic, assaults at grocery stores rose by 63% and assaults at convenience stores rose by 75%. Frustratingly, corporate policies often prevent employees from intervening in theft incidents, leading to further demoralization among retail workers.
Higher Prices and Localized Shortages
Consumers are likely to face higher prices for goods due to the effects of retail theft. Retailers lose billions of dollars each year, and some of that loss is passed on to shoppers through increased prices.
Furthermore, areas heavily impacted by organized retail theft may experience localized shortages. Theft rings target specific products for resale, causing temporary shortages that drive consumers towards online shopping.
Retailers have responded by adjusting their strategies. For example, Target has stopped stocking frequently stolen items in areas most affected by organized retail theft.
As Brian Cornell, CEO of Target, aptly stated, “When products are stolen, simply put, they’re no longer available for guests who depend on them. And left unchecked, theft and organized retail crime [begin] to degrade the communities we call home.”
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