Losses from retail theft jumped to $112.1 billion in 2022 from $93.9 billion in 2021, leading retailers nationwide either to change how they do business or, in some cases, shutter their operations for good, according to a new survey released by the National Retail Federation.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” David Johnston, NRF’s vice president for asset protection and retail operations, said in a statement Tuesday.
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The annual survey by the trade group collected information from 177 retail brands across 28 different sectors — including apparel, jewelry, grocery, and department stores — and accounted for more than 97,000 retail locations and $1.6 trillion in annual retail sales.
Retailers reported that organized retail crime, or ORC, is their top concern due to the heightened levels of violence they have experienced. Sixty-seven percent of respondents said they have seen a spike in violence from ORC gangs compared with a year ago. Twenty-eight percent reported they had to close specific locations, 45% said they had to reduce operating hours, and 30% said they had to reduce or alter in-store product selection as a direct result of crime.
As the violence or threats of violence grew, more and more retailers told their employees to take a “hands-off” approach out of an abundance of caution. There was also a 17% jump in the number of retailers who instructed employees to take no action whatsoever to apprehend shoplifters.
While employers have been shielding their employees from danger, retailers have also been upping their prevention efforts. About 46% have turned to outside security personnel to patrol their shops, while 53% have increased their technology and software solution budgets in the past year. About 54% have increased employee workplace violence training.
“Retailers are piloting and implementing a number of loss prevention practices to deter, prevent, and mitigate these substantial losses,” Loss Prevention Research Council Director Read Hayes said. “In addition to enhancing traditional security measures, many are also allocating resources to innovative emerging technologies for future prevention.”
The metro areas hit hardest by ORC were Los Angeles, San Francisco, Oakland, Houston, New York, and Seattle, according to the survey.
It was also reported that the types of products stolen are not necessarily based on price but on how quickly they can be resold, a shift from how ORC rings used to operate. While luxury goods are still on the list of top items, outerwear, batteries, energy drinks, shoes, and kitchen accessories are among the products that can be fenced quickly.
The survey comes on the heels of Target announcing it would close nine stores across four states — New York, Oregon, Washington, and California — claiming theft at the locations was not only harming business but putting the safety of employees and customers in jeopardy.
“We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all,” the retailer said in a statement on Tuesday.
Target has been vocal about retail theft in its stores, specifically about organized retail crime.
In May, Michael Fiddelke, Target’s chief financial officer, said that if the shrinking trend continued, the retail chain would lose $500 million in profit. The company has also been spending more on security, including third-party guard services.
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Retail shrink refers to the difference between how much inventory a retailer is supposed to have on its balance sheet and how much it actually has. Shrink can be anything from shoplifting to employee theft, cashier error, and damaged goods sent by the vendor.
Executives at other retailers such as Macy’s and Dick’s Sporting Goods have warned Wall Street about the impact retail theft is having on their businesses.
