18 May 2023 , 12:30
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The CEO of Target has made a revelation about the devastating toll that theft has taken on the company and an increase in "violent" thefts in the retailers stores.
Target is projected to suffer a staggering $500 million loss in profits this year due to missing inventory 'shrink' caused by theft.
Inventory shrink is when a company has fewer products on shelves than the reported inventory.
During a first-quarter earnings call CEO Brian Cornell disclosed that “Worsening shrink rates are putting significant pressure on our financial results."
He described the situation as an "urgent issue" not just for Target but across the entire retail industry.
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CEO Brian Cornell said thefts are an 'urgent issue'"When products are stolen, simply put, they’re no longer available for our guests who depend on them," said Mr Cornell.
“Violent incidents are increasing. What I'm most concerned with is it puts our team and our guests in harm's way."
Retail theft has reached "epidemic" levels, according to National Retail Federation Vice President of Asset Protection and Retail Operations David Johnston, and has now gone beyond individual theft to become a more organized operation.
The brand rolled out more security tags, loss prevention officers, and locked cases (UCG/Universal Images Group via Getty Images)He said: "Brazen scofflaws are openly stealing from national retailers and local businesses.
"Some retailers are curtailing their hours or even closing their doors due to theft.
"These criminal acts are beyond a by-product of a challenging economy or mental health concerns.
"The frequency, scale, and number of people stealing tells a different story.", Forbes reports.
Target CEO said the company stands to lose $500million in profit due to organized retail theft (Bloomberg via Getty Images)The Chief Operating Officer of Target John Mulligan, shared some of the measures being taken to mitigate the shrinkage in stores during the call.
These include bolstering security, adjusting product selection, and implementing anti-theft displays.
Notably, a Target location in San Francisco, California, recently gained attention for installing security glass throughout entire aisles in the beauty section, as seen in a YouTube video.
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Target has rolled out various controversial anti-theft measures, including additional security tags, loss prevention officers, and locked cases for unsold products within stores.
The company is also working with legislators, law enforcement, and retail industry partners to support public policies aimed at creating safer environments and keeping stores open.
However, Mulligan acknowledged that the balance between security and customer satisfaction remains a challenge for the retail giant, as law-abiding customers are impacted by the added security measures.
While Target has not confirmed if theft was the primary factor behind the closure of approximately 2,000 stores in the US, the CEO did not dismiss the possibility if the problem is not brought under control.