Retail crisis: thefts, closures and layoffs

Global career transition firm Challenger, Gray & Navidad, Inc. published a report in which it revealed that the retail industry has made some of the most cuts to its workforce this year. Until November of this year, within the industry there were around 72,182 layoffs. That number reflects a 258% increase compared to last year (179,520).

Challenger Report November 23 by Veronica Silveri on Scribd

Million-dollar losses

In addition to the layoffs, retailers have been victims of the crime crisis that is plaguing the country. The National Retail Federation (NRF) revealed that theft accounted for around two-thirds (65%) of retail businesses' "unknown" financial losses :

"Unknown losses" encompass various forms of revenue decline: "Measured as a percentage of sales, the unknown loss percentage typically includes losses caused by internal and external theft, operational or process errors, and systemic errors." External theft accounted for 36% of losses, another 29% was due to internal (employee) theft.

Data from the 2023 National Retail Security Survey revealed that in 2022 the average "unknown" loss rate for retailers had a 1.6% increase (more than $112 billion) compared to the 1.4% increase in 2021.

Retail closures

One of the consequences of theft is the closure of businesses. Big companies - Walmart, Target, Macy's and others - have been forced to close the doors of dozens of their stores this year after being repeatedly robbed across the country. Many of these companies warn that they will close more establishments if vigilance is not increased and the number of crimes is not reduced. In addition to all this, self-payments have also made it easier for people to leave the premises without paying for items.

Around 35 retail stores have closed in California, 23 in New York and 18 in Illinois. According to the DailyMail, some of the top retailers closing their doors are:

- Walmart: Its CEO, Doug McMillon, declared that theft in its stores was the highest out of all similar companies in the country. He also warned that if this did not decrease, they would be forced to close them. After this alert, the retail giant announced the closure of 17 of its stores in nine states.

- Target: the company revealed that it lost an amount of 400 million dollars due to theft of merchandise from its stores. The retailer announced the closure of four stores in Baltimore, Minnesota, Pennsylvania and Virginia in the coming months.

- Walgreens: financial director James Kehoe stated that in 2022 they reached theft rates "that represented 3.5% of sales." Five of its stores have closed in San Francisco alone. This year, Walgreens closed one store in Chicago, three in Texas and two in Florida.

- Macy's: the giant will close four stores in the first quarter of 2023 in California, Colorado, Hawaii and Maryland. The closures are part of the company's three-year plan to shut down 125 facilities due to an increase in theft that is cutting into the company's profits.