Walmart CEO warns locations may close and ‘prices will be higher’
An increasing number of current and former CEOs have issued warnings about an increase in retail thefts across the United States, which could trigger higher prices and locations to close.
“Today, this thing is an epidemic. It’s spreading faster than COVID,” former Home Depot CEO Bob Nardelli told Fox News on Thursday. “The degree of severity now, it’s not just theft, it’s smash and grab. There’s an entitlement out there that if you have it, you’ve worked hard to earn it. I want it. I’m just going to take it.”
Last week, an 83-year-old Home Depot worker was killed after being shoved by a thief at a North Carolina location, officials said. Gary Rastor, the worker, attempted to confront a suspect who was making off with three power washers before he was pushed to the ground; he later died due to complications from his injuries.
While appearing on CNBC Tuesday, Walmart CEO Doug McMillon warned that retail theft is “higher than what it has historically been” and suggested that it will create widespread problems in some areas. “If that’s not corrected over time, prices will be higher, and/or stores will close,” McMillon told the outlet this week.
“I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it,” he added. McMillon did not indicate what locations could be closed due to theft incidents.
In September, the National Retail Federation reported that retail theft and other inventory loss—known as shrink—reached $94.5 billion in 2021, while reports indicate that retail theft incidents increased by about 26 percent last year.
“Violence is an increasingly important concern among retailers,” including shootings and assault, according to the report. “As has been detailed throughout this report, external theft and [organized retail crime] in particular, is a significant and growing area of concern for retailers,” it said.
“This is an industry-wide problem that is often driven by criminal networks, and we are collaborating with multiple stakeholders to find industry-wide solutions,” Target’s CFO Michael Fiddelke said in an investor call last month. The amount Target has shrunk over the past year, he said, “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.”
In the call, Fiddelke said shoplifting has increased about 50 percent year-over-year. Most of those shoplifting incidents are due to organized retail theft, not individual shoplifters, he said.
Organized looting and retail theft gangs have caused shortfalls for the retail industry amid supply chain problems and years of COVID-19-related disturbances, said the U.S. Chamber of Commerce earlier this year.
“Retail theft is becoming a national crisis, hurting businesses in every state and the communities they serve. We call on policymakers to tackle this problem head-on before it gets further out of control. No store should have to close because of theft,” the organization said at the time, noting that “these crimes are not victimless.”
“In addition to the growing number of thefts that turn violent, innocent consumers, employees, local communities, and business owners and shareholders bear the costs of rising retail theft,” the group said. “Twenty-five percent of small businesses report raising prices as a result of shoplifting. Some retailers have been forced to shutter locations in response to rampant theft.”
Notably, in San Francisco, drugstore Walgreens closed several locations in San Francisco amid a rise of thefts and shoplifting that had been blamed on policies implemented under District Attorney Chesa Boudin, who was recalled earlier this year.
Several days ago, 18 people were arrested in Los Angeles when police busted an organized crime ring that targeted clothing and shoe stores as recently as last week, authorities said.
The suspects ranged in age from 15 to 20 and were linked to retail thefts at chain stores Thursday and Friday where about $23,000 worth of goods were stolen, according to the Los Angeles Police Department. They were likely involved in at least 14 earlier incidents, with stolen goods valued at $90,000, police said Saturday.
The department did not identify the suspects or the retailers that were hit. The stolen merchandise was recovered and returned to the retailers, the Los Angeles Times reported. The investigation included the Los Angeles County Sheriff’s Department.
The Associated Press contributed to this report.