Chains are using theft to mask other issues, report says
Chains are using theft to mask other issues, report says
www.cnn.com
Crime spree? Retailers are actually overstating the extent of theft, report says | CNN Business
5 comments
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No shit. External shrink numbers are always a very tiny percentage of operating costs. Look at rent and labor if you want to know what they're actually trying to balance.
It's idiotic that businesses fight labor so much btw. They always view labor as a controllable cost and rent as one that's not controllable, which is bullshit. Margins always have to be made, no matter what business rents the space. If labor costs across an industry increase to the point that rents don't justify running a business there, the landlords will drop their prices (after going bankrupt and losing the property to the bank and the bank losing money from that). If you keep squeezing the workers, the landlords will raise their prices. It's always capital squeezing everything out of everyone, no matter how you look at it.
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That last sentence sinks it in even more.
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This is the best summary I could come up with:
“Companies are also likely using the opportunity to draw attention away” from lower profit margins due to higher promotions and poor inventory planning in recent quarters, William Blair retail analysts Dylan Carden and Phillip Blee said in a report this week.
The analysts noted that overall shrink — merchandise losses due to external and internal theft, damaged products, inventory mismanagement and other errors — makes up just 1.5% to 2% of retailers’ sales.
Target said last month that it’s closing nine stores in major cities specifically because “theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance.”
One analysis by journalist Judd Legum at Popular Information found that the stores Target is closing in both New York and San Francisco had lower reported theft rates compared to other nearby locations.
“We have to acknowledge potentially ulterior, more opportunistic motives.” “Target could be using shrink to mask other issues, including poor inventory management, which came to a head in 2022 following supply chain disruption” and is closing stores to “boost overall margins.”
They have called for local and state government to more aggressively prosecute organized retail crime, lower the dollar thresholds for theft to rise to a felony, and reverse policies to eliminate cash bail.
The original article contains 1,031 words, the summary contains 210 words. Saved 80%. I'm a bot and I'm open source!
I've sort of suspected this. Every time I read a headline that says "BigCorp is closing 100 stores because people are stealing stuff" it seems like a ridiculous reason.
Especially when their are affordable solutions to protect the store.
https://m.youtube.com/watch?v=6i-nMWgBUp0