US retailers are closing stores, cutting operating hours and changing product selections in response to an increase in crime, according to a survey by the National Retail Federation.
(Bloomberg) — US retailers are closing stores, cutting operating hours and changing product selections in response to an increase in crime, according to a survey by the National Retail Federation.
Safety concerns are also intensifying, with about half of respondents saying shoplifters were “much more” aggressive and violent last year than in 2021, the NRF said Tuesday. One source of increased theft is organized retail crime, and its biggest effects were in Los Angeles, the San Francisco Bay area, Houston, New York and Seattle, said the trade group, which represents retailers.
“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,” David Johnston, the NRF’s vice president for asset protection and retail operations, said in a statement.
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The report underscores the stepped-up complaints about worsening crime from retailers including Target Corp., Nordstrom Inc. and Dick’s Sporting Goods Inc. At the same time, the NRF study adds broader financial context, saying total losses from shrink – an industry term that includes external theft – edged up to 1.6% of sales last year. That was higher than the 1.4% shrink rate in 2021 but in line with the numbers from 2019 and 2020.
Faced with more pain from shrink — which also includes inventory lost to damage, administrative error and theft by employees — about 28% of survey respondents said they’d closed some stores. Around 45% said they’d pared operating hours at some locations and 30% said they’d reduced or altered the availability of products.
Total shrink rose to about $112 billion last year, the NRF said. That was up from approximately $94 billion the year before.
In 2022, external theft accounted for 36% of shrink, down a percentage point from the year before, according to the NRF. That includes organized retail crime, which the trade group defines as theft or fraud geared toward financial gain as opposed to personal use. Such activity typically involves a criminal enterprise that oversees large-scale theft from multiple stores.
Another 29% of shrink came from internal theft, in line with last year, the trade group said. About 27% was due to “process, control failures and errors,” roughly a percentage point more than in 2021. The rest came from unknown causes or other factors.
The NRF’s survey was conducted online among retail loss-prevention and security executives. The results covered 177 retail brands, which accounted for $1.6 trillion in annual sales and represented 97,000 locations across the US.
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