Retailer to Close Swathe of US Outlets As ‘Theft & Organized Crime’ Soar
© AFP 2023 / SAUL LOEB
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News that Target locations are being closed down throughout the US comes as retailers have been sounding the alarm about the extent to which their businesses have been affected by surging crime, with employees at risk and profits shrinking.
Target, the eighth-largest retailer in the United States according to annual sales, is closing nine branches in four states on 21 October.
The retail corporation that operates a chain of hypermarkets and discount department stores claimed that it was prompted to do so because of "theft and organized retail crime", its press release announced on 26 September.
The branches set for the axe comprise four in San Francisco, two in Seattle, and three in Portland, Oregon. According to Target, even measures such as tighter security and an increased number of guards had failed to prevent thefts at the affected stores. "Despite our efforts, unfortunately, we continue to face fundamental challenges to operating these stores," the business said.
"We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance... We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all,” Target said.
12 February 2022, 15:09 GMT
In August, Brian Cornell - chief executive of the company that has almost 2,000 stores in the US - told media that assaults on Target staff had spiked 120 percent over the first five months of the year compared with same period in 2022.
"Our team continues to face an unacceptable amount of retail theft and organized retail crime. Unfortunately, safety incidents associated with theft are moving in the wrong direction," he was quoted as saying.
Cornell also acknowledged that sales had slumped because of inflation and high prices for food and the basket of household essentials forcing Americans to tighten their purse strings.
Other retailers have also bemoaned how surging crime rates were affecting their business and forcing their branches to shut. Whole Foods was compelled to take such a drastic measure at one of its flagship stores in San Francisco earlier in the year and it too blamed the temporary closure on rampant crime in the area that was endangering employees. Other retailers also singled out theft as contributing to shrinking profits.
This comes as retail crime racked up losses worth around $112.1Bln in 2022, according to a report by the National Retail Federation published on Tuesday.
"Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire. Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category,” said the National Retail Federation's vice-president for Asset Protection and Retail Operations, David Johnston
Organized retail crime (ORC) is termed as “professional shoplifting,” and usually involves two or more people who “conspire to steal retail merchandise with the intention of reselling the items at a profit". Such crimes often turn violent, posing a safety threat to retail workers and customers. ORC is often part of a larger criminal operation that may also engage in fraud and money-laundering.
The report added that because of increased violence accompanying such crimes, an increasing number of retailers have acknowledged that employees are not authorized to try to stop shoplifters. Policy reform was urged as one of the ways the retail industry could boost efforts to combat ORC.
Thus, after the INFORM Consumers Act was passed, which requires online marketplaces to disclose identities of high-volume sellers, retailers have been pushing for the passage of another bill, the Combating Organized Retail Crime Act. The latter proposes harsher penalties for thefts.
28 February 2023, 11:07 GMT
