On Thursday, a Walgreens executive suggested that the company might have been overly focused on the increase in thefts and shoplifting attempts last year.
Shoplifting has escalated into a significant crisis nationwide, leading some stores to shut down and secure everyday items. Organized crime groups are aggressively looting stores and have intensified their violent tactics.
Driving the news: “Maybe we cried too much last year,” said Walgreens finance chief James Kehoe during an earnings call, referencing the company’s concerns about shoplifting.
Walgreens’ shrink rate decreased from 3.5% in 2021 to 2.5% in the latest quarter. “We’re stabilized,” Kehoe remarked that Walgreens is “quite happy with where we are.”
The broader context: Shrinkage refers to inventory loss caused by theft, fraud, damage, and other issues.
Retail theft amounts to nearly $100 billion annually, as reported by the National Retail Federation last year..
The Combating Organized Retail Crime Act, introduced in September, aims to establish a federal task force to tackle organized retail crime.
Retailers are increasingly advocating for stricter verification of online sellers to prevent the resale of stolen goods.
Walgreens has employed private security guards and secured simple items so that they are only accessible with assistance from an associate.
“Probably we put in too much, and we might step back a little bit from that,” Kehoe stated.
Yes, but: Other major retailers, such as Walmart and Target, have also recently highlighted theft as a severe issue.
For instance, Target reported a $400 million loss due to shrinkage in November, and Walmart CEO Doug McMillon mentioned that the company might need to close stores or raise prices if shrinkage issues are not addressed effectively.
