Overview

• Following a 2022 report from the National Retail Federation, retail theft in the US has accumulated losses of $112.1 billion, a significant increase from $93.9 billion in the previous year, with Los Angeles, San Francisco, and Houston ranking the highest.
• Major retail outlets such as Walmart and Target are closing dozens of stores across the nation due to the unsustainable rise in organized crimes and the negative impact on business performance.
• According to Melodie van der Baan, CEO of Max Retail, local governance plays a significant role in the increase in shoplifting due to lenient consequences in certain regions, and store employees are encouraged not to interfere due to safety risks.
• In addition to rising theft rates, major retailers have identified alternative factors contributing to store closures; analysts from William Blair suggest poor management and decreased profitability may be contributing to the recent rash of closures.
• Despite increased theft rates, investment bank William Blair predicts a level of stability in shrink levels for 2023, implying that retail chains can still be successful with high-margin focus and effective inventory management, even amidst high crime rates.