But it’s only by looking at real data that we can make an informed judgment. Retail theft has become a cudgel used to attack policies such as California’s Proposition 47, which reclassified some lower-value felony theft offenses as misdemeanors. That makes transparency about retail crime more important. Worryingly, violent incidents, which sometimes involve theft, have risen too, putting workers in danger. Crime statistics, National Retail Federation surveys and other data also show that theft has increased. We know that the majority of shrink is composed of theft, by both outside parties and retail employees. None of this is to suggest that retailers are being completely untruthful or that theft isn’t an issue. Profits are affected by an enormous number of factors, and it’s all too easy to hide other issues behind crime. Dick’s blamed much of the decline on theft but did not quantify the impact, so it’s impossible to know the true scale of the problem. This problem is particularly acute when retailers speak generally about the effect of crime on profits, as Dick’s - whose net earnings just dropped 23% - did in its latest update. This lack of transparency is an issue both for investors and for informed public discourse on the matter. So increasing shrink rates could be due to deteriorating internal processes as much as or more than theft. Unfortunately, however, few retailers go into much depth about the composition of their shrink. Retail theft is often committed by a store’s own employees, for example, or by customers at self-checkout. It’s also worth noting that the portion of shrink that can be blamed on crime isn’t entirely due to shoplifters or the sort of brazen robberies that attract public attention. Walgreens and other retailers have blamed store closures on high theft rates and are testing new concepts to combat crime. Dick’s Sporting Goods, Ulta Beauty, Dollar Tree, Foot Locker, Home Depot, Walmart and other retailers also identified crime as a growing problem this earnings season. Target’s shrink is on course to pass the $1-billion mark this year, up from $763 billion last year. Total retail “shrink” - usually cast as a proxy for theft - was $94.5 billion in 2021, up from $90.8 billion in 2020, according to the National Retail Federation. Top-line figures generally support the view that retail crime has increased. We are, it seems, living through an epidemic of retail crime. And sensational crimes such as the recent mob robberies at malls in Canoga Park and Glendale have grabbed news headlines. Videos of people walking out of stores with armfuls of goods they didn’t pay for have captured attention on social media. It’s become a buzzword on retail earnings calls.
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