On September 26, Target announced it was closing nine stores "because theft and organized retail crime are…contributing to unsustainable business performance." Target said that before making the decision to shutter the stores, it had "invested heavily in strategies to prevent and stop theft and organized retail crime." But ultimately, Target claimed, those efforts failed to make those stores "successful."
The various spin on the reasons for large chain stores having to shut some branches for the store's overall poor performance began to sound over-complicated. I decided to look up,
Organized Retail Crime
"Organized retail crime refers to professional criminal enterprises ranging from regional gangs to international crime rings and other organized crime occurring in retail environments. Operations include truckjacking, shoplifting, smash and grab, cargo theft, and cargo diversion. One person acting alone is not considered an example of organized retail crime. Working in teams, some create distractions while others steal items judiciously, indiscriminately or violently. "
I am surmising that Republicans who repeatedly blame what's wrong in this country with Black Lives that don't matter and Hispanic marauders immigrating illegally were content with the blaming of gangs. Now, I see that cargo theft and truckjacking would account for large amounts of stolen goods, but that we, the public, would not have a clue about this factor. I'm so glad that Catherine Cortez Masto is being confronted--she's "better than this."
Thankyou for your diligent scrutiny and research!
Judd this is such good work and I thank you for it. Without investigative reporting corporate America would continue undeterred. Corporations, now that they are people (note sarcasm) , must adhere to the ethical standards that a civil society demands.
There are other factors that contribute to shoplifting. As retailers continue to reduce the number of employees in their stores they are reducing the deterrent (risk of getting caught) and increasing opportunity. Forcing more customers to be the cashier and check themselves out because only one lane is open increases opportunity of intentional theft and accidental theft by customers unfamiliar with the process. Retail employees, especially cashiers are frequently subjected to rude behavior by customers. Add to that they are minimum wage employees with low expectations of pay increases or making a livable wage, and overworked due to staff reductions so that they barely have time to lift their heads and see what is happening around them. Throw in lax gun laws and the increased probability that a shoplifter who has decided to take the risk is carrying a gun and now an employee’s risk of getting hurt has increased.
In summary there is a balance between risk, opportunity and desire. There will always be retail theft but as long as opportunity is limited and deterrence outweighs the desire there will manageable theft. I think retail companies have brought this current situation on themselves. By reducing staff and paying employees the minimum they can to increase profits they have caused an imbalance. In fact some risk due to guns and violence has shifted from the shoplifter to the employee. Retail companies are seeing the consequences.
Personally I don’t believe external theft has increased that much in general to close stores.
So... rather than figuring out what's really going on, and/or admitting that management has made some mistakes and misjudged what might happen in this changing retail/employee environment, management at Target (together with several other retailers) is finding scapegoats to blame when their strategies don't work out as they so breathlessly claimed they would just a few years ago?
Yet somehow, despite their strategy of dishonesty and refusing to take responsibility, not to mention sucking far more resources out of the company's coffers than they're worth, these corporate executives expect their employees not to follow their example of dishonesty and scapegoating?
Meanwhile, Wall Street continues to think the answer to every problem is fewer employees and more highly paid executives and corporate boards. Can we at least consider the possibility that all the paranoia about lower class people stealing from their companies is psychological projection on the part of the executives who levels of compensation far outweigh any theft in their stores?
It’s very true that our large chain stores, as well as our “mom and pop” owned stores, suffer from retail theft, shortages, etc. I will admit that I haven’t worked in this field since the mid to late 70s, so I’m positive it’s lot different now. But, back then I did gain employment with a large chain store as the head of security. I was in charge of 5 stores in two states on the east coast. All 5 of these stores were suffering from large amounts of theft. I’m not going to call it retail theft because it wasn’t all just that. But, I went into the stores one at a time, assessed the issues I saw, then set a plan to fix them. The store managers didn’t like the changes I proposed, but they, let’s say, ‘came around to my way of thinking’. Inside 1 year, I had cut their loss by theft by 2/3. It’s totally impossible to stop it all, but when enough arrest are made, and people prosecuted, it seemed the word got out that that store wasn’t a ‘free stealing’ store anymore.
Target stores have always been known to be extremely lax in security when it comes to theft. They haven’t had the right people for store security. You just can’t have an elderly person at the door greeting people as they come in, and helping people get shopping carts, and call that ‘security’. And, Target isn’t the only one that is lax. All of them are now. First, security personnel working aren’t producing income for the store. The store managers frown on them because it’s dollars out of their bonuses. You’d be surprised how many times I went into one of my stores and caught my security people unloading trucks, or putting stock out on the shelves, or some other ‘retail’ job other than watching fur theft, or doing their assigned duties. That’s where the store managers and I clashed, more than once, and they always lost that argument. Especially when I laid out their alternative solution to my problem.
I worked for a marketing firm that sold to retailers like Target and these stores, like so many others have so many people in and out of their warehouse space, their docks, their “secure” locations, it’s impossible to know what is happening. They depend heavily upon suppliers to display, maintain, and manage the product that comes into the store, as well. Additionally, so much of the merchandise is lost due to staffing shortages and mismanagement. Examples include improper turn and shrinkage due to misplacement on the planner. All of this could have been exacerbated by expansion into areas that could not have been a good fit for the model.
When I spoke with the managers, they were all overwhelmed and they often changed frequently. What I can also tell you is that corporate had no idea what was going on at the store level.
I surmise that corporate closed underperforming stores just because they were underperforming and like Judd said, they took the opportunity to make use of the political climate.
Whether they are pushing the narrative intentionally is to be seen but the consequences are that more black and brown people will be locked up and since they are the only people still shopping in person anymore, that’s the wrong move.
Great work. Thank you. This feels exactly like the oil companies stories about supply and demand to continually increase prices to maintain their astronomical profits. We buy it hook, line and sinker every time.
This was quite the eye opener for those of us who assume that our Congress has the ability to use the best data to support a bill. What we again see is they cherry pick the data that supports their agenda. It was also a disturbing sidebar that DHS is being more and more converted into some security apparatus.
It's not a surprise that CEO's would prefer to cast blame on something that they cannot easily control (theft) versus explaining that they made poor decisions (poor store locations, strategies, merchandise). However, it is truly shocking that major news organizations report so much of this information without doing their due diligence. While theft isn't prosecuted as much as it should be and it's never been easier to off load stolen merchandise, it's also not the extreme that is being pedaled in the news. Our cultural obsession with following the trends of the day also generates enormous merchandise waste and impacts profitability. Candor from the C-suite would be much appreciated.
Having been a small retail store owner, the vast amount of shrink comes from behind the register, not in front of it. To further this thread, a large grocery store opened within feet from my location within a year of me closing my doors because of insufficient sales. Imagine my satisfied grin after they also closed for the same reason.
Companies large and small are loathe to admit bad decisions as accountability is something you hold others to and not oneself. Also the musical chairs of most companies means that the people who made the decisions are rarely around long enough to be held responsible.
I wonder if Target’s statements might be considered false and misleading for securities law purposes so it could be sued in a class action?
I’m not sure how stores would be underreporting retail theft: managers don’t like reporting that they messed up and lost goods to error, seem more likely to over report theft.
“We’re not going to report our measurements because they don’t support the claims our lobbyists want to be paid to make,” is kind of like regulator capture in reverse.
Big box stores suffer the most at the hands of Amazon and other competitors. Hey, these are the ‘market conditions’ corporate bigwigs swear by, live their lives by, especially the pure or fasci-capitalists. It’s one of the reasons WalMart (who suck even more) superserves more rural areas; less competition from any of em. Because blame is the new problem solving, and sacrifice has great tax implications for them.
Thanks for your hard work and excellent reporting. I still ask what are the racial compositions of the neighborhoods around the stores being closed? Any red-lining going on here or with the “smaller” stores?
Superb and original report, as always.