The Economy

This came out of Target's earnings call with Brian Cornell the other day.

Target CEO: We're seeing 'violent' incidents in our stores, and it's costing us millions

 

Organized Retail Crime.

 

Shrinkage is always a problem in retail, whether it's shoplifting or your employees putting feet on merchandise.

But the big retailers have been complaining a lot about how their losses have increased dramatically over the past two to three years, and they are pointing more and more to organized theft rings. Anecdotally, FWIW, there has been a lot more violent incidents in stores over that time.

You'll probably remember during the pandemic, videos of mobs converging on stores in San Francisco and cleaning them out. Again anecdotally, that kind of high-profile cell phone video stuff isn't happening as much now, but the level of overall theft hasn't abated, and the runaway consumer price inflation is what is fueling it now. People who can't afford non discretionary items are out looking for bargains, so the market for stolen stuff from Target or Wal-Mart or Home Depot is really robust.

It affects all of us. As an example, Wal-Mart just closed a bunch of stores in bad neighborhoods in Chicago because they were losing so much money and they decided enough was enough. So now those neighborhoods don't have the lower prices Wal-Mart offers over a corner store or bodega. It also gets passed along in the form of higher prices to the rest of us. If Target is losing $500 million to $1 billion in shrinkage on a yearly basis, there is no way there isn't a spillover that hits shoppers.