Retail giant Target recently announced the closure of nine stores across the United States, specifically citing theft, violence, and organized retail crime as the driving factors behind the decision. The affected stores are located in major cities such as New York City, San Francisco, Seattle, and Portland.
Three Target stores located in the Bay Area will be closing down. **It was originally reported that two of the stores were in San Francisco, but the other two are in Oakland and Pittsburg, CA.** These stores include the SF location of 1690 Folsom St, Oakland's 2650 Broadway Target, and the 4301 Century Blvd Target in Pittsburg.
Target states that the closures are due to increasing concerns about the safety of both employees and shoppers at these locations. Each store is set to close on October 21, 2023. The closures have raised concerns regarding the long-term effects of rising theft and violence on retail businesses in major cities.
Though the nine closing stores represent only a small fraction of Target's nearly 2,000 locations in the U.S, the decision is significant as it highlights the ongoing challenges faced by retailers in preventing crime, maintaining a safe environment, and serving the community, particularly in low-income and minority neighborhoods. Target's focus on the impact of theft and organized retail crime demonstrates an ongoing, serious issue for retailers who depend on a safe and secure environment for their customers and staff.
According to the AP News, Target has made numerous efforts to prevent and stop theft in its stores, such as the addition of more security team workers, third-party guard services, and the use of theft deterrent tools like locking up merchandise. Despite these efforts, the company acknowledges that it continues to face "fundamental challenges" in operating these stores safely and profitably.
Target CEO Brian Cornell has been vocal about the issue of rising theft in the past, with the company revealing in May that theft-related losses could amount to $500 million more than last year. The losses from theft were already estimated to be between $700 million and $800 million in the previous year. This could indicate that theft losses could exceed $1.2 billion for the current fiscal year.
Furthermore, Cornell stated that violent incidents against Target workers increased by 120% during the first five months of the year compared to the same period a year ago, highlighting the severity of the problem. As Target continues to wrestle with these challenges, it becomes essential to understand the broader effects of organized retail crime on the retail industry as a whole.
A CNBC article mentions that the National Retail Federation (NRF), the industry's major trade association, released its latest National Retail Security Survey, which found that the effect of theft on retailers' bottom lines remains relatively consistent with previous years. Total retail shrink, or inventory loss, grew to more than $112 billion in 2022, up from $93.9 billion in the previous year. As a percentage of sales, average annual shrink increased to 1.57%, up from 1.44% in 2021, which generally aligns with past years and is considered a normal and healthy level of shrink for the industry.
However, retailers and trade associations continue to push for legislative reform to address organized retail crime. In addition to the Inform Act, passed in 2022, which requires online marketplaces to disclose the identities of certain high-volume sellers in an effort to deter the sale of stolen and counterfeit goods, efforts are now focused on the passage of the Combating Organized Retail Crime Act. This bill aims to establish stiffer penalties for theft offenses, alter the threshold for federal theft cases, and provide retailers with a venue to exchange information with one another and law enforcement through the proposed Organized Retail Crime Coordination Center.
**Correction on Locations of Target Stores Closing