Home Depot’s CFO slams America’s ‘retail theft problem’ after a surge in crime led to mass retail closures
HOME Depot’s CFO has highlighted the rise in organized crime at major retailers in the United States.
The executive stated that a rise in retail theft is causing both large and small businesses to close their doors.
Home Depot CFO Richard McPhail said in a call, “The country has a problem with retail theft.” CNBC on Tuesday.
“We’re confident that we can mitigate and alleviate that pressure, but that pressure is definitely out there.”
In March, said Scott Glenn, vice president of asset protection at Home Depot CNBC crime rose into double digits.
“I can tell you that in our world we know that crime is on the rise. We see it in our stores every day,” he said.
“Our internal information tells us that year-on-year growth is in the double digits.”
The National Retail Federation found that organized retail crime is the main cause of in-store shrinkage.
Shrinkage is a term that describes when a retailer has fewer products than the books show.
According to a report, retailers lost $94.5 billion from shrinkage in 2021, an increase of over $4 billion from the previous year NRF Survey 2022.
In addition, the survey reports a 26.5 percent increase in organized retail crime in 2021.
Organized crime has not only affected Home Depot but also other major retailers such as Walmart.
Walmart CEO Doug McMillon warned shoppers in December about retail crime that could potentially lead to store closures.
“Theft is a problem. It’s higher than in the past,” he said CNBC.
He warned that “prices will go up and/or stores will close” if the situation doesn’t improve.
San Francisco, California is set to lose three major department stores in the coming months to “rampant criminal activity.”
First, Nordstrom announced that it would permanently close its two stores.
The Nordstrom Rack Store on Market Street will close on July 1st.
The Nordstrom store in the nearby Westfield Mall will then close at the end of August.
Also on Market Street, Saks Off 5th is slated to close for good later in the fall.
A few doors down, Anthropologie bids farewell on May 13 after two decades in the same place.
Each store has given slightly different reasons for its closures, but overall, these chains agree that downtown San Francisco isn’t the premier shopping destination it once was.
“The dynamics of the downtown San Francisco market have changed dramatically over the past several years,” Nordstrom’s chief store officer wrote in an email to employees.
The chief executive said the changes in the city “impacted customer traffic to our stores and our ability to operate successfully.”
Meanwhile, Westfield, where one of the affected Nordstrom stores is located, has pointed the finger at “rampant criminal activity.”
Westfield stated, “Nordstrom’s proposed closure underscores the deteriorating situation in downtown San Francisco.
“A growing number of retailers and businesses are fleeing the area due to the unsafe conditions for customers, retailers and employees, and the fact that these significant issues are preventing the area’s economic recovery.”
SMALL BUSINESS SHOPPEEPER
Small business owners have also been hit hard by theft and have not been able to recover from retail crime like their more popular counterparts.
Consign Couture, a luxury consignment store, was forced to close in March 2023 after nearly $56,000 worth of bags, clothing and shoes were stolen in 2022.
Shocking videos from 2022 show customers brazenly accepting bags of thousands without even thinking about it.
As the owner of this small business, Tamara Young finds it difficult to absorb losses and pay for security like neighboring Nordstrom store.
Young said, “The amount of work that goes into running a small business, right down to the research, tagging and training to get this right, and then somebody just steals all the work in a day, it’s like, ‘What is that supposed to be?’ ?’”