Running errands isn’t so easy as it used to be. Businesses have been reducing operating hours, locking up items and threatening to shutter stores completely. Companies like Target, Walmart, Dollar General and Home Depot have been sounding the alarm on retail theft, USA Today reports. Missing inventory was talked about more during the previous quarter’s earnings call than any quarter on record, says Bloomberg. While there’s a lack of federal crime statistics showing how serious retail theft is across the U.S., and some question whether companies' concerns are overblown, retailers’ reactions are affecting customers. “Stores take (theft) on the chin from a profit and loss point of view, but then they pass on this cost of doing business in the form of higher prices,” said Mark Cohen, director of retail studies at Columbia Business School. “Make no bones about it, it's a price that we all pay.”
Retailers have been increasingly concerned about a loss of profits because of shrinkage – an industry term that refers to the difference between the inventory a store has on its balance sheet and its actual inventory. Target CEO Brian Cornell said the company expects shrink – a “worsening trend” – to reduce the company’s 2023 profitability by more than $500 million compared with last year if trends continue. Cornell said shrink can be driven by multiple factors – the term includes everything from items lost or damaged items to theft by employees or visitors. He and other executives have raised concerns over a rise in organized retail theft, in which thieves steal merchandise to resell for a profit, often online through sites like Amazon or eBay. Some data pointing to a rise in theft has been contested, with critics questioning if retailers are mistakenly blaming too great a share of their losses on organized crime. A report last year from the National Retail Federation found $94.5 billion in losses in 2021 because of shrink, up from $90.8 billion in 2020.