I've been hearing a lot on earnings calls and a lot of people talking talking about retail shrinkage, aka theft of products.
Wanted to get everyone's thoughts on this. Do you see retail stores packing up shop and moving out of major cities? Does everything shift to strictly online purchases? Do cities/governments rewrite laws for arrests?
Similar to how CEOs force feed hot topics like 'AI', 'Blockchain', etc. into earnings calls to make their companies seem high tech, they will do the same with excuses like this to divert blame.
Some retail models are inherently more at risk to shrinkage. Think drug stores, grocery, etc. But a Nike store should be relatively unimpacted. If it was that big a deal just hire a low cost security person
True, but security isn't there to stop theft, they are there to de-escalate fights between people or people and workers. Theft is using more than one person operating a scheme and companies would rather lose products than lawsuits.
This is not true. I’ve seen security stop theft and call the police on thieves a few times.
It’s just a matter of how much ground staff you hire. If you only have 1 security man for the entirety of a Home Depot he’s obviously going to prioritize violent conflicts instead of stopping some guy from stealing a pack of nails.
"a Nike store should be relatively unimpacted"
A lot of it is blame-shifting and lobbying. CEOs love to act like they're facing false choices and they "just simply don't know if they can continue in City X if things don't change....". Like when companies threaten to move out of their HQ city to get better tax incentives.
I've heard some ideas that you have to look into the definition of "shrinkage". Some use it as an accounting entry for old inventory they get rid of. So CEOs and the like don't want to seem that they made unwise purchase decisions, so they shift the narrative. Not saying people aren't selling, just saying their are more than one contributing factors.
Here’s a datapoint for the Philadelphia area - Wawa is closing many of its stores in the city, and is piloting a model where you order everything at a kiosk and the workers collect it for you from shelves behind a counter. This is a direct result of a lax stance on small crime like theft, loitering, and mischief. In that sense, if this were fully implemented, the retail model would go full circle, back to the way things were 100 years ago. At that time it was unusual for a customer to pick items off a shelf.
When you run retail shops on a skeleton crew without security, theft will happen. Huge shocker.
Just another way to deflect blame to some externality instead of looking within and hiring more people.
Not sure I've ever been to a Wawa operating on a skeleton crew, and this makes me think you haven't seen videos
. I couldn't see how a fully staffed store would be able to compete against dozens of teens.Most convenience stores I’ve been to as of recent have 1 employee working in the register. And just go to any other department store these days and start counting the number of employees. It’s reduced significantly. Even pre-pandemic a couple of employees and potentially even a security guy would check your receipt to see you bought the items. Now nothing.
The thing is in the video you posted dozens of kids don’t rob a store on the first time. The theft would have gotten progressively worse and worse over time as they faced no consequences each time as there was no security at the shop to begin with and not enough workers. Organized criminals aren’t stupid, they seek out places where they know there will be no consequences. They rarely actually intend to fight security and try to overtake them and risk getting shot and killed. I’ve been to plenty of smaller shops in the hood with 1 or 2 armed security guys and that’s enough for the shop to be very safe. For a place like Home Depot you might want some more.
It’s more real than not. There are drug stores with 75% of inventory locked now - not exaggerating. Some have closed prime locations because of theft. There are now armed off duty police officers at others. I’ve seen everything I described.
The department stores are a mixed story. A lot of them were already in decline and the surge in theft has accelerated their financial woes. I have not seen any of the group style robberies but have witnessed an individual brazenly go into a sports goods store and walk out with a few items while some employees were screaming. This incident happened in a good area.
One of my buddies owns his own security company and he just signed a big contract to have guards at pharmacies. Crazy stuff.
I used to work at a TJ Maxx during college, that shit sucked. We had shrinkage all the time.
would you actually see people take stuff or you noticed/saw it later during inventory or on cameras?
I did catch someone once doing that, an older woman but it was within sight of the registers and one of my coworkers saw that so they retrieved the item (perfume or something I think) and just asked her to leave. My manager did say though that they had a problem with it overall since they did review the tapes every so often. I usually worked the shifts where we got new inventory and put it on the shelves though so I don't really recall seeing less stuff than would have been ordinarily sold. It is a cheap store though generally so shrinkage at places like that is probably significant based on the clientele (trashy suburban people).
nah they'll just bump up prices to take into account theft. why do you think we have such huge inflation after all the lootings?
Shrink is cyclical, so I wouldn’t look too much into the elevated levels management teams are calling out. I’d agree with the point above that it’s an easier way to divert blame away from margins being pressure by lower volumes, and now we’re at the point where retailers & grocers are no longer able to push MSD-HSD pricing every quarter.
Let's not beat around the bush. Walmart has closed certain stores that were not "fiscally/economically viable" or whatever.
What they meant was stores on the bus line had too much theft that it was no longer worth it to keep it open.
Those in poverty then suffer due to bad apples perpetuating the struggle.
https://www.businessinsider.com/walmart-store-closings-2023-full-list?a…
Hilarious isn't it.
The second biggest supermarket in Australia just reported huge step ups in theft rates.
It's almost as if the cost savings they've reaped by replacing checkout staff with self checkout wasn't worth it.
Yea, but I'd think they have the numbers where self checkout is saving money. So if they have to pay a cashier say $5 an hour, but people only steal $4 per hour, they still make a $1 (the store). That may have an initially, but now it might be more of a problem because everyone is getting wise to not swiping the bar code of every item for payment. I know at stores the people who work there could seem to care less if I'm swiping every bar code or not.
Even if they did care, it’s impossible to monitor. At one of the chain stores I go to 1 employee monitors 8 self checkout stations, and there’s always somebody struggling to use the machine, so that sole employee is usually occupied. And they don’t check your receipt at the front door like they used to because they cut that position. It’s actually laughable how easy these shops have made theft by being so short staffed.
Thanks for clarifying shrinkage as theft. My first thought was jumping into a cold pool 😆
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