We're at an interesting intersection in the retail sector.
On the one hand, retail has never been stronger. Despite some long-anticipated bankruptcies in the brick-and-mortar space, large incumbents like Amazon, (AMZN) -) Target, and Walmart have never been stronger.
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Post-covid spending has come back with a vengeance, and deal-hungry consumers are more discerning than ever. We're all used to treating ourselves now and then to a new pair of Nikes, Lululemon apparel, lipstick or small kitchen appliance. During the pandemic spending became a cathartic habit that many of us can't seem to kick.
But with good habits come less-savory ones. A problem many retailers continue to grapple with is shoplifting, which saw a sharp uptick during the pandemic
Even the big players have been forced to address it in recent months, since it eats into their bottom lines.
CEOs at Target and Walmart Address Shoplifting
Target (TGT) -) Chief Executive Brian Cornell said in the Q1 earnings call that the retailer had been losing millions of dollars of merchandise due to the issue.
"Beyond macroeconomic challenges, we continue to contend with significant headwinds caused by inventory shrink, building on a worsening trend that emerged last year," he said.
"While shrink can be driven by multiple factors, theft, and organized retail crime are increasingly urgent issues impacting the team and our guests and other retailers. The problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm's way."
And Walmart (WMT) -) CEO Doug McMillon said in December that shoplifting was "higher than what it historically has been." In May, half its Chicago locations shuttered due to underperformance issues associated with theft.
And the chains with some of the biggest issues are drugstores. On virtually every corner -- namely in densely populated areas -- and full of essentials, they are hotbeds for theft.
These days razors can cost $20, a gallon of milk upward of $7 and bandages close to $15. Many of us need these things, but when life feels more expensive due to the rising cost of living, in many cities shoplifting also rises.
Walgreens (WBA) -) has been one of the most outspoken critics of the growing problem. The drugstore recently launched a new program whereby only two aisles of essentials are available for in-person shopping, and the rest can be ordered via kiosk, where you must wait for an employee to do the shopping for you.
Big Problems Call for Even Bigger Solutions
With outsized issues come outsized solutions. And rolling out a new store prototype takes time (and more employees). That's why some Walgreens locations are taking matters into their own hands.
Some stores in the San Francisco area have resorted to chaining certain aisles and areas to prevent crime.
"NEW: Local Walgreens chains up the frozen food section to deter theft. San Francisco, Geary at 16th Av location today," San Francisco-based political commentator Richie Greenberg tweeted, along with a photo of aisles of frozen food cordoned off by large metal chains to prevent the doors from opening.
NEW: Local Walgreens chains up the frozen food section to deter theft. San Francisco, Geary at 16th Av location today. pic.twitter.com/anFCEeFQsK
— Richie Greenberg (@greenbergnation) July 15, 2023
CBS News' Betty Yu said employees in the area reported as many as 20 shoplifting incidents per day, sometimes enough to clean the entire store out of late-night-snack favorites, including pizza and ice cream.
NEW: The Walgreens at 16th/Geary in San Francisco has chained up the freezer section ⛓️
— Betty Yu (@bett_yu) July 18, 2023
Workers said normally shoplifters clean out all the pizza and ice cream every night. They’re usually hit 20x a day. The whole store is virtually locked up. @KPIXtv
h/t @greenbergnation pic.twitter.com/lfFWmkLWdo
TheStreet has reached out to Walgreens for comment.
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