On September 26, executives of the Target franchise announced they will be closing nine stores across four major cities. Why? Here’s the scoop
Reason For Closures
Target will be closing nine stores in four major locations due to theft and organized retail crime. The theft and the organized retail crime have made the environment unsafe for both staff and customers. Not only is the environment unsafe but also creates unsustainability for the business. The crimes becoming so bad that previous stores have closed as well as making changes to the merchandise and/or store layouts.
Target says in a statement, “We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance.” The company also recognizes that its stores play a crucial part in the communities they reside in but stands firm on needing the environment to be safe for all.
Even though it is not clear that the crimes are growing outstandingly, there are still some economic fears. Considering the fact that inflation is a major problem in today’s world with rising borrowing costs, shoplifting commonly comes as a consequence.
Target plans to close two locations in Seattle, three locations in San Francisco and Oakland, three locations in Portland, and an East Harlem location in New York City. These stores will be officially closing their doors on October 21. Employees from these locations will have the ability to transfer to other stores.
Dilemmas, Losses and Motives
Target isn’t the only retail company dealing with the theft and organized retail crime epidemic. For example, Nordstrom and Whole Foods had to close stores in San Francisco as a result of these crimes. In Dollar Tree’s quarterly earning call, the store says they might stop selling certain products in some stores.
Coincidentally the day Target announced the multiple store closures, The National Retail Federation released new figures on the state of retail theft. The NRF is the retail industry’s largest trade group. On Tuesday, the federation stated that the average shrink caused retailers to lose $112.1 billion in 2022 and $93.9 billion in 2021.
Now you may be thinking what is the motive behind all this organized retail crime? ORC is not a need-based type of theft i.e. baby formula or food. This action is a more thought-out type of crime. ORC involves a large group of people that target stores and shoplift higher-value items such as electronics, handbags, clothing, etc.
Once these groups have the merchandise, they resell the items on secondary marketplaces such as Facebook Marketplace, eBay, and OfferUp. They even sell it back in the legitimate supply chain. Another factor that law enforcement believes could be the fact that new justice reform laws that those arrested on grand theft charges can no longer jail a person or even require bail, no matter how many times the person gets caught.
Possible Solutions to Stop Retail Theft
Target and many other companies have made investments and tried ways to prevent retail theft. For instance, Target hired more security, locking products in cases, changing layouts of their stores. The company has went as far as partnering with the U.S. Department of Homeland Security to combat theft and make “significant investments” into cyber defense. They are hoping to boost threat intelligence and data analysis to track and capture organized crime groups.
Additionally, Read Hayes, a criminologist at the University of Florida and director of the Loss Prevention Research Council, has another possible solution to this crime epidemic. Hayes and his team are developing a heatmap that tracks reported retail crime to law enforcement with corresponding store closures in those areas. With the heatmap, it showed that most crimes take place inside of urban areas. Even Walgreens revealed a prototype store in Chicago where there were only two aisles of “low-value” products such as Band-Aids, snacks and batteries. Everything else has to be ordered online.
Hayes goes on to explain the closures of stores have a domino effect within its community. “It’s like throwing a pebble in water and seeing the ripples from it. If a large anchor store in a mall pulls out, this reduces the foot traffic to the mall. Other stores then pull out. Over time, it could result in an abandoned building, blight, and other crime.”
Written by Saniya Fields
Sources:
CNN: Target says it will close nine stores in major cities across four states because of theft and organized crime by Ramishah Maruf, Parija Kavilanz, and Cheri Mossburg
CNN: This isn’t theft of need. A more insidious type of crime is pushing some stores to close by Parija Kavilanz
The Washington Post: Target to close nine stores, blames violence tied to organized theft by Jaclyn Peiser
Top and featured image Courtesy of Mike Mozart’s Flickr Page – Creative Commons License
Inset image Courtesy of Mike Mozart’s Flickr Page – Creative Commons License
