Retailers Continue to Face 'Unacceptable Amount' of ORC
Walmart’s ‘shrink’ challenges differ from those of other retail giants, CEO says
Like many retailers, Walmart Inc. is dealing with inventory “shrink,” although CEO Doug McMillon says the company’s specific challenges are different from those faced by other big retailers.

While there are a number of potential reasons behind inventory shrink — such as damaged items — theft and organized retail crime are increasingly important drivers, according to major retailers such as Target Corp This week, Target CEO Brian Cornell said that the company is facing an “unacceptable amount” of retail theft and organized retail crime.

Home Depot Inc. also described the retail industry’s battle with shrink this week and highlighted a new U.S. law designed to aid efforts to tackle a problem that costs the sector billions of dollars a year.

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Act), which went into effect June 27, is designed to add more transparency to online transactions and deter criminals from acquiring stolen, counterfeit or unsafe items and selling them through online marketplaces. The INFORM Consumers Act requires e-commerce sites to verify and disclose information about their high-volume third-party sellers.

Last year, the National Retail Federation reported that retail-industry shrink amounted to $94.5 billion in 2021, up from $90.8 billion in 2020, and was primarily driven by external theft, including organized retail crime. The NRF’s National Retail Security Survey, which was conducted with the Loss Prevention Research Council, found that retailers, on average, saw a 26.5% increase in organized retail crime incidents in 2021. Eight in 10 retailers surveyed also reported that violence and aggression associated with organized retail crime incidents had increased.

Walmart’s McMillon touched on the issue of retail theft during the call Thursday. “We do think that in some jurisdictions here in the U.S., there needs to be action taken to help protect people from crime, including theft,” he said. However, he also noted that shrink “is comprised of more than one thing.”

Walmart’s chief financial officer, John David Rainey, said shrink had increased “a bit” this year, and it also increased last year. “It’s uneven across the country — it’s not in every market,” he added. “Some markets are higher than others.”  msn.com


'The Widespread Impact of ORC is Huge'
Retailers Struggle With Mounting Losses Due to Theft
At the beginning of the month New York Gov. Kathy Hochul introduced a $40 million package aimed at combating the rising retail theft across the state. It included retail-focused anti-theft teams for police and legislation proposals that increase penalties for anyone who assaults retail workers, as well as a $5 million tax credit to help small business owners invest in security for their shops.

Retail theft, particularly organized theft, has become a mounting problem for store owners and one that is increasingly dictating the question of whether a particular location should remain open. Officials are starting to take note and put in place measures to help stem the tide.

It has become a significant problem, says Mark Sigal, CEO of Datex Property Solutions, who tells GlobeSt.com that the risk of violence or litigation deters store-level personnel from confronting petty criminals, especially as theft escalates into coordinated syndicates. Sigal, from San Francisco, highlights the link between community behavior incentives and crime rates, emphasizing the need for balanced enforcement measures by city authorities.

According to Sean Unsell, RDC senior studio director and associate principal, the widespread impact of organized retail theft is huge, affecting not only major retailers but also smaller family businesses. He notes the adoption of various technologies and security measures by retailers and developers to combat theft, alongside governmental efforts such as task forces and grant funding to address the issue.

Chris Carley, Capstone Advisors VP of leasing, warns of store closures in affected areas as a consequence of escalating theft problems, signaling a troubling outcome for retailers and Sandy Sigal, president and CEO of NewMark Merrill, stresses the imperative for proactive strategies among retailers to mitigate organized theft’s substantial impact on margins and customer retention.

Collaboration between owners, retailers, law enforcement, and policymakers, alongside technological solutions, Sigal says, is deemed essential in addressing this challenge and shaping future retail site evaluations and locations. globest.com


Progressives Trying to Save Prop 47 in California
Opinion: This tough-on-crime proposal won’t solve California retail theft, but it would crowd our prisons
California’s Proposition 47, a milestone in criminal justice reform, is under threat. The proposed Homelessness, Drug Addiction and Theft Reduction Act, which seeks to undo important aspects of Proposition 47, would take us backward to prioritize punishment over rehabilitation.

Proposition 47 was passed in 2014 to revise penalties for nonviolent lower-level drug and property offenses. Before the reform, prosecutors had broader discretion to treat some property crimes as felonies or misdemeanors. The new law made shoplifting under $950 a misdemeanor and loosened some penalties for other property and drug crimes. It also applied retroactively, allowing incarcerated individuals to petition for release or sentence reduction.

Proposition 47 worked quickly: In its first year, it reduced the state prison population by 4,700, according to an estimate from the Legislative Analyst’s Office. Over the last 10 years, the reforms have saved California more than $800 million.

Yet despite a decade of success, misinformation abounds. The proposed act, sponsored by the Californians for Safer Communities coalition and funded largely by retailers such as Walmart, Home Depot and Target, aims to increase penalities for drug dealers with a new “treatment-mandated felony” crime for drug possession after two previous convictions. Offenders would be given the “option” to undergo drug and mental health treatment instead of incarceration, though it’s not clear what kind of programs they would enter and if those would even have capacity for new admissions. Additionally, it proposes felony charges for repeat theft offenders.

The coalition announced last month that it had collected 900,000 signatures, more than enough to put the change before voters on the November ballot. Its supporters claim that Proposition 47 has increased property theft, overdose and homelessness. Following some high-profile retail crimes in California, emotions run strong on this issue.

But the proposed Homelessness, Drug Addiction and Theft Reduction Act does not expand those resources. Instead, it would push California’s incarceration rates back up. Even prosecutors in the state have opposed the measure on the grounds that it would regress to failed policies. latimes.com


Another Approach to Fight California's Theft Surge
Elias: A modest proposal to solve California’s retail theft problem

‘We can do it without (changing) Prop. 47,’ Gov. Newsom says, by adding up total value of goods repeat offenders steal

Ask almost any police chiefs the reasons behind the last year’s rash of well orchestrated “smash-and-grab” robberies around California, and chances are they’ll say it’s largely because of the state’s 2014 Proposition 47.

Most would cite a need to change or reverse Prop. 47’s increase to $950 in the minimum theft value considered a felony or at least suggest a lower limit. That “solution” ignores the reality that police don’t like dealing with the trivial, though.

Set the limit too low, and large numbers of shoplifters could get off scot-free, with not even a misdemeanor conviction because many police departments won’t fool around with “minor” crimes. This could create an even larger cadre of thieves than now plagues California stores of many types.

At last sound thinking on how to fix Prop. 47’s flaws has arrived, though. It comes from California legislators, Gov. Gavin Newsom and the sponsors of a new initiative that seems sure to qualify for the fall ballot.

So how can their useful ideas be sped into law? The answer is for the business and consumer leaders behind the initiative to deal with Newsom and the Legislature soon, then have Sacramento make laws of what they all agree on. This is possible under a little-used decade-old law letting initiative sponsors pull their measures from the ballot if they reach agreements with lawmakers. mercurynews.com


Allen mall erects mass shooting memorial sculpture

New Ohio House bill aims to curb violent gun crime
 

Physical Stores Are Still the 'Heart' of Retail
How Online Shopping Is Saving the Bricks-and-Mortar Store

Retailers are increasingly relying on their shops as fulfillment hubs

Store owners once viewed e-commerce as a mounting threat to their survival. Now, more bricks-and-mortar stores are thriving after integrating their properties with the online shopping experience.

Shoppers browse in person to see, touch or try on items before ordering them online. They are picking up or returning purchases in stores. And retailers are increasingly relying on their shops as fulfillment hubs, shipping items ordered online from store stockrooms in addition to warehouses.

Overall, nearly 42% of e-commerce orders last year involved stores, up from about 27% in 2015, according to research firm GlobalData.

“There was a narrative that as online grew, stores would become less relevant. But it hasn’t worked out that way,” said Neil Saunders, managing director at GlobalData. “In many ways, the store is still the heart or hub of retail.”

It is another example of how online-only retail has its limits, and why physical stores are making a comeback. After years of overbuilding that lead to a sharp contraction, retailers are on track to open more stores than they close in 2024 for the third consecutive year, according to advisory and research firm Coresight Research.

Many retailers have found that it is too expensive and difficult to attract and retain customers without physical stores. And using stores as pickup and drop-off points helps lower the labor, packaging and shipping costs involved in online orders. wsj.com


Retail Expansions & Format Changes
Store Expansion News: April update

Chain Store Age’s monthly roundup of brick-and-mortar expansion plans across the retail industry.

Retailers big and small made headlines in April regarding store expansions and new formats.

• Chewy enters brick-and-mortar vet space
• Toys”R”Us to expand in U.K.
• Foot Locker opens new store concept
• Mango to grow U.S. footprint
• Paris Baguette to enter Mexico
• Little Caesars plans growth in seven states
• Sky Zone moves towards 300 locations
• Aldi opens checkout-free store
• Bloomingdale's rolls out camp-themed pop-ups
• JCPenney opens first new store in eight years
• Papa Johns to add 50 stores
• Uniqlo to expand across U.S.
• Build-A-Bear to 50 new stores chainstoreage.com


50 Employees Rescued from Collapsed FedEx Depot
Dozens rescued as tornado collapses Michigan FedEx depot

Dozens of people have been rescued from a FedEx depot in Michigan that had partially collapsed after a tornado.

The rare tornado hit the small town of Portage, eight miles (13km) south of Kalamazoo, on Tuesday evening. Officials said all 50 people trapped inside escaped with no serious injuries. Severe weather warnings are still in place from Ohio to Mississippi with a few tornadoes still expected.

Michigan's tornadoes damaged buildings and power lines in the region, and on Wednesday, more than 56 million people remained under threat in at least 18 states. More than 30,000 people are still without electricity, according to the PowerOutages US website. bbc.com


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