We really didn't know how good we had it.
The covid-19 pandemic upended many of the societal norms we took for granted as a combination of forced social distancing, the emergence of mask cultural and routine societal decay dissolved many of the social contracts people held amongst each other.
One of the biggest social casualties from the pandemic is the attitude about theft, especially from large consumer goods retailers.
Earlier this year, CVS told Axios that the company experienced a 300% increase in retail theft at its stores since the pandemic started.
The increase has been attributed to a rise organized theft rings featuring large groups of people who steal and move the stolen items in a lucrative secondary market.
In 2021, the Retail Industry Leaders Association reported nearly $214 million in stolen merchandise, representing about $48 million in tax loss and more than 5,000 jobs lost.
While designer clothing seems to be the most lucrative item for theft (34% of retailers surveyed by NRF reported designer thefts) consumer goods items were some of the most popular to steal led by laundry detergent (21%), razors (20%), and deodorant (15%).
Rite Aid's NYC Problem
The problem has gotten so bad for Rite Aid (RAD) in New York City that the company specifically called the city out in its most recent earnings call.
The store "experienced unexpected headwinds this quarter from finance shrink, particularly in our New York urban stores," according to CEO Heyward Donigan.
Rite Aid says it suffered $5 million in losses due to theft in NYC in the most recent quarter alone.
"We're looking at literally putting everything behind showcases to ensure the products are there for customers who want to buy it," Arnaud Persaud, chief revenue officer said. "We've even had to go to the extent of using off-duty police officers in some of our stores."
"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," he said.
Earlier this year, Rite Aid was forced to close one of its stores in Hells Kitchen, which was once a 24-hour location due to uncontrollable shoplifting at the store located in the heart of the city on the corner of Eighth Avenue and West 50th Street.
At the time, Rite Aid said the move was part of a broader effort to close underperforming stores. But employees at the store had a different story.
“They come in every day, sometimes twice a day, with laundry bags and just load up on stuff,” an employee at the store told the New York Post. “They take whatever they want and we can’t do anything about it. It’s why the store is closing. They can’t afford to keep it open.”
What's Being Done
Just 18% of people arrested for shoplifting between 2015 and 2021 accounted for half of all shoplifting arrests, the city said, with the data suggesting a high recidivism rate .
"Where there is a persistent recidivist, we support pretrial detention," said Keechant Sewell, police commissioner for New York City.
The D.A.'s office also promised to target repeat offenders to stem the tide of thefts.
Municipalities are taking different steps to root out what is now known as a national problem.
Last week, California Governor Gavin Newsom signed legislation aimed at cracking down on the sale of stolen goods online into law. The legislation requires online marketplaces to require high-volume third-party sellers to provide contact and bank account information, as well as a seller's physical address to participate in the market.
Also last week on the federal level, Senate Judiciary Committee Ranking Member Chuck Grassley (R-IA) and Sen. Catherine Cortez Masto (D-NV) introduced the Combatting Organized Retail Crime Act which is billed as a "federal response to organized theft."
The bill would establish a division at Homeland Security specifically focused on organized theft that would provide tools to assist in the investigation and prosecution of organized retail crime, as well as resources to help recover lost goods and proceeds.
The two above legislations adhere closely to some of the remedies the U.S. Chamber of Commerce, the country's largest lobbying group, has proposed. But the group also wants state governments to "more clearly define" organized retail theft so that prosecutors can more aggressively go after the problem.
