Retail Theft a $94.5 Billion Crime Problem at American Stores

A massive rise in retail theft is contributing to “shrinkage” at brick-and-mortar retailers, contributing to the growth of online sales.

“The National Retail Federation estimates that shrink—an industry term for loss in inventory—amounted to roughly 1.4% of retail revenue in 2021, or roughly $94.5 billion. Most of that shrink is caused by theft, the Wall Street Journal reports.

The Globe reported on California’s retail theft last May:

The escalation of organized “smash-and-grab” robberies in cities around the country has been costly. CNN reported in January that retailers across America say shoplifting is now 2% to 3% of their total sales, forcing the retailers to install new security systems, video cameras and security staff.

A 2021 survey of retailers found 65% acknowledged an increase in violence, while 37% said Organized Retail Crime gangs were much more aggressive than in the past.

With every legislative solution killed by California’s Democratic supermajority, retailers and Chambers of Commerce formed Californians Against Retail and Residential Theft (CARRT), and launched a campaign to raise lawmakers’ and the public’s knowledge of the growing theft problem in the state. CARRT is a broad-based coalition of business associations, local groups, and victim organizations advocating for California officials to act now to undo the damage done by Proposition 47.

Not the Bee also addresses this shrinkage: the Covid lockdowns.

“Whoever had the bright idea to shut down the entire U.S. economy, confine people to their homes indefinitely, foment open-ended hysteria about a respiratory virus, and drive inflation to sky-high record rates — congratulations, your strategy is bearing fruit,” Not the Bee reported.

“Brick-and-mortar retail’s indisputable edge over e-commerce is that consumers can get what they want immediately, and can touch and feel the product before buying it. Rising theft — and stores’ measures to prevent it — could dull that edge,” WSJ said.

And who will pay for these increasing retail costs? “Retailers will ultimately pay for shrink risk in some form or another—either on the top line if they want to keep stores completely accessible or on the bottom line if they spend heavily on labor and mitigation measures,” WSJ said. “Finding the right balance will be key to preserving brick-and-mortar businesses.”

And if you wonder why toothpaste, shaving cream and laundry detergent is under lock and key at many stores, it is a theft mitigation measure, according to retailers.

California’s nonpartisan Public Policy Institute of California released a report that found a direct correlation between Proposition 47 and a marked increase in larceny thefts across California, despite many media reports attempting to refute the correlation, the Globe reported. As for any legislative support from the California Legislature, don’t hold your breath:

The California Assembly Public Safety Committee heard and killed Assembly Bill 1599 by Assemblyman Kevin Kiley (R-Granite Bay) in March, which sought to repeal Proposition 47, and “make crime illegal again.”

“Retail theft losses may be the straw that breaks the camel’s back,” said Julian Canete, President and CEO of the California Hispanic Chambers of Commerce. “Something needs to be done before mom and pop stores are stolen from our communities.”

Here is the Retail Security Survey.