Target’s CEO makes a shocking revelation that the theft at the toll retail store has plagued the company – and describes full actions
TARGET’s CEO has revealed the shocking consequences the retail toll theft has had on the company and has warned investors of the impact.
Target is expected to lose $500 million in profit this year due to a lack of inventory due to theft.
“It’s an urgent issue,” Cornell said during a earnings call on Wednesday.
“Not just for Target, but across the retail industry.”
He added that the company is making “significant investments in strategies to prevent this” but still expects the “depletion of inventories” to result in a huge profit hit.
Inventory reduction occurs when a company has fewer products on the shelves than the reported inventory.
The unrecorded items could either have been damaged, lost or stolen.
During the call, Chief Operating Officer John Mulligan shared the “remedial actions” the company is taking to halt in-store shrinkage, including increasing security, adjusting product selection and deploying anti-theft displays.
Just last month, The US Sun reported on a Target site where entire aisles were lined with safety glass.
A YouTube video of the store in San Francisco, California posted by Story rich news and weather shows the extensive anti-theft structure placed throughout the beauty area.
“As with other retailers, organized retail crime is a problem across our business,” a Target spokesman told The US Sun.
“We take proactive measures to ensure the safety of our teams and guests while deterring and preventing theft.”
The retail giant has launched several controversial anti-theft items in stores, citing a rise in shrinkage.
The brand introduced more security labels, loss prevention officers and locked cases to keep unsold products in store.
“These containment efforts include hiring additional security guards, adding third-party security guards at select locations, and deploying new technology and tools to protect merchandise from theft,” the spokesman continued.
“We work with legislators, law enforcement and retail industry partners to support public policy that helps achieve our goals of creating safe environments in our stores and keeping our doors open in communities across the country. “
According to Mulligan, more security comes at a cost to revenue because it creates frustrations with the customer experience.
Customers aren’t too happy with their in-store experiences considering how difficult anti-theft is to the customer experience.
“I didn’t think downtown Target could make my shopping experience worse, but locked cupboards for everyday toiletries — when there’s security AND cops posted at the entrances and roaming the store, not to mention top-notch surveillance,” said a buyer tweeted.
Last November, it was reported that a lack of inventory had cost Target $400 million in profits.
By the end of 2023, that number is expected to reach $600 million.
Theft and organized crime has been a hot topic in retail for the past few years, and every brand has introduced new theft prevention measures to combat theft.
According to the National Retail Federation, retailers lost $94.5 billion in 2021 to retail contraction, up from $90.8 billion in 2020.
Approximately 2,000 Target stores across the US have been closed. However, the company has yet to confirm whether theft was the primary cause of the closures.
However, Cornell did not rule out the possibility if the problem was not brought under control.
“Our stores create jobs, serve local shoppers and act as key hubs in communities across the country, and we will continue to do everything we can to keep our doors open,” he said.
“At the same time, we will closely monitor the safety of our team and guests, as well as the financial impact on our business as we chart the right path for the future at Target.”
In addition to lost profits, organized retail crime also carries the risk of becoming dangerous for both employees and customers.
Target has a policy that prohibits employees from dealing directly with suspected thieves, but violent confrontations can still occur.
“What worries me the most is that it puts our team and our guests at risk,” Cornell said.