Target has reportedly lost $400 million in profits this year because of organized thieves who have been systematically shoplifting merchandise from its discount stores. According to Yahoo Finance, Target CFO Michael Fiddelke said on a recent earnings call, “At Target, year-to-date, incremental shortage has already reduced our gross margin by more than $400 million vs. last year.”
He continued, “we expect it will reduce our gross margin by more than $600 million for the full year,” adding that “a handful of things that can drive shrink in our business and theft is certainly a key driver.” A Target representative explained that the “shrinkage” was attributed directly to “organized retail crime.”
Fiddelke also noted, “We know we’re not alone across retail in seeing a trend that I think has gotten increasingly worse over the last 12 to 18 months. So we’re taking the right actions in our stores to help curb that trend where we can, but that becomes an increasing headwind on our business and we know the business of others.”
In September, Rite Aid CEO Heyward Donigan reported that losses from theft, fraud and administrative mistakes had increased by $5 million year over year at the pharmacy chain. The company’s chief retail officer Andre Persaud said, “I think the headline here is the environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city,”
On several occasions, shoplifters have been seen systematically targeting Rite Aid locations in the NYC area this year, casually removing things from shelves in full view of security cameras. San Francisco Bay Area drug stores have also closed multiple locations due to rampant theft.
