According to retailers, recent quarterly earnings have been suffering greatly due to organized theft across several stores. Companies like Target (TGT) -), Rite-Aid (RAD) -), CVS (CVS) -), Walgreens (WBA) -), and more have reported alarmingly high rates of shoplifting. These companies say that the problem is so common that it’s cutting heavily into profits, and even affecting quarterly earnings.
However, according to one defense attorney, roving bands of shoplifting organizations aren’t the problem. “Despite relentless media efforts to create a moral panic around it, evidence suggests theft is extremely low right now,” writes attorney and social activist David Menschel. “There is almost no evidence [that] the typical theft [is committed by] organized rings.”
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1. Of course shoplifting isn’t victimless. 2. Despite relentless media efforts to create a moral panic around it, evidence suggests theft is extremely low right now. 3. There is almost no evidence the typical theft by “organized rings.” … https://t.co/oIFmIkbrlc
— David Menschel (@davidminpdx) September 5, 2023
In the thread, Menschel cites reports that more than half of shoplifting is committed by store employees. He also points to the rise in self-checkout machines, which allow retail stores to staff fewer cashiers, but create a situation where shoplifting is much easier.
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In his citation, a data analysis from GlobalData says that “there is a bit of bandwagoning at the moment” regarding a shoplifting panic. He also says that the narrative has become so pervasive that CEOs “now use it as a crutch to deflect attention from their own poor business decisions.”
He’s not wrong. Dick’s Sporting Goods (DKS) -) recently blamed its $3 billion value loss on “elevated inventory shrink, an increasingly serious issue impacting many retailers.” That’s a lot of camouflage-printed vests. Nordstrom (JWN) -) CEO Erik Nordstrom said that "losses from theft are at historical highs”, which was contributing to the company’s 8.3% revenue shrink in its second quarter. Meanwhile, retailers are locking more and more items behind glass casing, claiming that the move prevents theft.
It’s not just shareholders who are falling for claims of high shoplifting rates. California Governor Gavin Newsom recently signed legislation that requires online marketplaces to require high-volume third-party sellers to provide contact and bank account information, plus a seller's physical address to sell things online.
And on a federal level, members of the Senate Judiciary Committee introduced the Combatting Organized Retail Crime Act, which was pitched as a "federal response to organized theft."
But Menschel believes retail has a much larger problem with theft that needs to be addressed — wage theft. As some pundits try to draw a link between the reported rise in shoplifting and widespread economic insecurity, companies withholding pay from workers could be the missing piece of the puzzle worth considering.
10. The other “retail theft” that the media almost entirely ignores is wage theft— that is retail stores screwing their own workers out of pay. It is a far larger problem than shoplifting. And yet reporters couldn’t care less. https://t.co/brJqtN2iqy
— David Menschel (@davidminpdx) September 5, 2023
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