Retailers & Landlords Fight Over Store Closure Causes
Is it crime, as Target says, or is it a change in store footprints?

Target Is Blaming Theft for Store Closures, But Landlords Say Otherwise

Retailer wanted to send a message to California, landlord says

Target Corp. grabbed national headlines last week when it blamed worsening theft for its plan to shut nine stores in four states, feeding into a narrative on the deteriorating state of America’s cities. But for some of the landlords who spent years courting the giant retailer, the closings pointed to more considerations at play.

Take Target’s first-ever Manhattan location, in East Harlem. With more than 100,000 square feet of selling space, the location opened more than a decade ago — long before the retailer figured out that to be profitable in big cities, it had to veer from its big-box playbook and build smaller footprints. Now, the store in a six-story shopping center is preparing to shut down.

Instead of abandoning Harlem, Target has already signed a lease to open a store less than half the size only a mile and a half away.

The closing is a “business decision to move to small-format stores,” said David Blumenfeld, a principal at Blumenfeld Development Group, which owns the shopping center that has housed the big Target since 2010. The retailer didn’t raise theft as an issue leading up to the announcement, he said.

Target disputes the landlord’s characterization but declined to provide any details about why the company decided to close some stores and not others.

Target has said theft is one of the factors pressuring its profit. Inventory losses from theft, damage and administrative error reduced the retailer’s gross-margin rate by almost a percentage point in the second quarter from a year earlier.

Chief Executive Officer Brian Cornell has warned about the impact of organized retail crime gangs on multiple earnings calls. Target said it had long discussed the problems at the nine stores with real estate partners. The company will still have a significant presence in the four metro areas where it’s closing stores: New York, San Francisco, Seattle and Portland, Oregon. bloomberg.com


Is Internal Store Theft Being Overlooked?
It's the second largest contributor to loss

Retail’s Most Underrated Theft Problem Is Employees Stealing From Their Stores
According to recent data from the National Retail Federation (NRF), internal theft — or when employees steal from their own stores — amounts to a significant portion of overall theft loss as well. This has been an ongoing issue for storeowners, but is reemerging as a concern amid the rise in overall crime.

In 2022, internal theft was responsible for 29 percent of retailers’ loss related shrink, or when stores have fewer products than recorded in inventory books largely driven by retail crime. The survey, which was conducted among senior retail loss prevention and security executives, found that internal and external theft together accounted for nearly two-thirds (or 65 percent) of retailers’ shrink in 2022. In the footwear sector, the shrink rate is less than 1.5 percent.

While it currently ranks as the second largest contributor to loss, internal theft is no small threat. NRF found that the average dollar loss reported for an internal theft was $2,180 per investigation, on par with the levels in 2021 and 2020. However, retailers have recently appeared to be more focused on external threats like organized crime rings and shoplifters.

“It’s certainly not making the headlines like shoplifting,” said John Harmon, managing director of technology research at Coresight Research, which offers insights and data on retail and technology. “But I think the threat is always there.”

At the most basic level, a retail store employee who wants to steal from his or her store has an advantage above a regular shoplifter. That is, they have a deeper understanding of how the store functions and what, if any, security measures are in place. When it comes to footwear stores, the situation is similar to broader retail, though shoes can be more difficult to conceal than other items like accessories and apparel. In some cases, employees might assist their friends in shoplifting a pair of shoes and turn a blind eye.

This knowledge can assist a theft-prone employee throughout the year. But the problem worsens in the fall and winter with the influx of short-term seasonal workers, who come on board for just a few months to assist during major shopping holidays. footwearnews.com


No End in Sight for Retail Theft's Upward Climb in Cities Across U.S.
Stores won’t get a break from rising theft through 2023
Retail theft in Delaware is causing concerns among local families and business owners. The economic impact, according to industry experts, could result in store closings.

The number of retail thefts reported in New Castle County — including theft by people working together or targeting specific items — is expected to rise 16% over last year, and it’s been rising since the middle of 2020, according to a Delaware State Police analysis.

“If the level of theft continues increasing, I would not be shocked or surprised to see retailers close in Delaware,” said Julie Miro Wenger, executive director of the Delaware Food Industry Council, which represents grocery and drugstores with a total of 12,000 employees.

It also affects shoppers. The average customer has seen the byproducts of retail theft: Increased security, some items locked up, entrances closed in the evening to force all traffic in and out through one door.

Giant Food, CVS, Acme and others have locked up popular items and closed secondary entrances in the evening and at night. Theft at department stores make up the highest category of thefts, according to Delaware State Police statistics.

In New Castle County, those stores include Target, Old Navy, Boscov’s, Kohl’s, Ulta, Walmart, Lowe’s, The Home Depot, Walgreens, Wawa, Macy’s, Dick’s and JCPenney, according to a recent State Police presentation at Food Industry Council Retail Theft Symposium.

Organized retail theft — groups of people who target specific stores or items — is a growing problem in Delaware, retailers, police and prosecutors say, although everyone says it’s not at the level of last week’s mass looting in Philadelphia.

Some organized groups are essentially taking orders for products that will be resold, police said. townsquaredelaware.com


Lawmakers Point Fingers At Each Other Over Crime Surge
Some blame progressive laws like Prop 47 for fueling the surge

Smash-and-grab robberies wreak havoc on US stores

Organized retail crime is skyrocketing, forcing major chains to close locations and causing losses of up to $112 billion

Waves of thefts

Conservative sectors argue that the rise of robberies in California is the result of the 2014 approval of Proposition 47, which reduced the penalty for property crimes if the guilty party did not have a criminal record. The measure was a bid to ease the pressure on California’s overcrowded prisons, which have the biggest population in the country.

Increase in property crimes

While Republicans argue that California is soft on crime, the Democrat state says that no one who commits a smash-and-grab robbery goes unpunished. Last year, 2,313 property crimes were committed, an increase of 6.2% compared to 2021.

The rise of robberies is not limited to California. “Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” said NRF Vice President for Asset Protection and Retail Operations David Johnston in a statement. “Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.”

Retailers, meanwhile, are strengthening their security teams, hiring more security guards, storing merchandise of increasingly less value in locked boxes and blocking and limiting entrances and exits to stores to prevent robberies. But this has not proven to be enough. As a direct result of crime, 30% of companies have reduced or altered in-store product selection, 45% have reduced operating hours, and 28% have been forced, like Target, to opt for the most drastic measure: closing a store location.  english.elpais.com


Is Seattle Becoming the New San Francisco?
Hard Rock Cafe becomes latest business to shutter Seattle location amid rising crime

The city has begun drawing comparisons to San Francisco which has seen businesses fleeing the downtown core.

Seattle’s downtown Hard Rock Cafe will close in December as more retailers flee the area. 66 workers will be out of a job before the year’s end.

The news comes on the heels of Target announcing they will be closing two of their Seattle locations in response to theft and organized retail crime. The flagship Nike store that had been a Seattle icon since 1996 closed its doors in January. In June, Amazon Go shuttered locations downtown due to underperformance.

The city has begun drawing comparisons to San Francisco which has seen businesses fleeing the downtown core. Crime has spiked in Seattle following the city council’s decision to defund the police in 2020. The Seattle Police Department is operating far below the safe limits of deployable officers for a city its size following the exodus of over 600 officers.

Last month, the Emerald City flew past last year’s total number of homicides, which has increased 7 percent in the first half of 2023, on track to beat the all-time high of homicides. Seattle was one of 10 cities to report an increase, even as other cities saw a decline during the same time period. Seattle's King County is also on track to have another year of record homicides. thepostmillennial.com


$15.3M Theft Grant Funds New San Francisco Theft Blitz
San Francisco police launch ‘blitz’ crackdown on retail crime
San Francisco police on Friday announced a new campaign to crack down on retail theft, the latest high-profile law enforcement action undertaken in a city still struggling to shake its negative reputation when it comes to crime.

The initiative — backed by a $15.3-million state grant to combat organized retail crime — entails deploying “blitz enforcement operations” that will involve teams of officers patrolling popular city shopping areas.

Crime, including shoplifting, has long been a hot-button issue in San Francisco — with some saying theft and other illegal activity are the reason retailers including Nordstrom, Whole Foods and Target have opted to close locations in the city.

As of the start of this month, overall crime was down in San Francisco compared to 2022 — with larceny thefts down nearly 8%, according to Police Department data. In a statement, the department noted that arrests are also increasing.

Robberies, however, were up 15% from Jan. 1 to Oct. 1 of this year, compared to the same period in 2022. Though officially announced Friday, authorities are already touting the results of previous “blitz” enforcement actions. latimes.com


Chicago's Retail Theft Task Force
Sheriff's office turns to old-school tactics to combat Mag Mile retail theft
Last year, Illinois Attorney General Kwame Raoul granted the Cook County Sheriff’s Office $276,000 to fight retail crime. That grant funding allowed Dart to pay officers overtime and beef up a retail theft task force earlier this year that patrols Michigan Avenue and the Gold Coast.

That cash infusion is new, but Dart and his officers note they’re combating retail theft by using old-school tactics of walking the beat and talking to merchants.

The retail task force comes at a time when Chicago Police Department headcount is down, with at least 1,700 vacancies, and struggling to combat ongoing thefts. They’re also buttressing private security at stores, which are meant to act as a deterrent but have little power to apprehend or even intimidate thieves. Around 38% of retailers use some form of private security, according to a sheriff’s office survey of 189 retailers on North Michigan Avenue, Oak Street and Walton Street.

Residents, store managers and law enforcement all note that thieves today are highly coordinated and flagrant. Conn and his team argue that they have made a dent in retail theft since grant funding kicked in this May. From May 15 through Oct. 1, retail thefts in the area have fallen by 18.3% compared to the same period the prior year, according to the sheriff’s office. chicagobusiness.com


Perception or Reality? Are Flash Mob Thefts Really Surging?
Videos of 'flash mob' thefts are everywhere, but are the incidents increasing?
California has seen a number of large-scale smash-and-grabs in recent months. Last month in Philadelphia, thieves looted stores across the city over the course of several nights, with prosecutors charging more than 70 people.

It's unclear from the data whether these specific incidents are actually on the rise, but retailers, law enforcement authorities and elected officials are raising the alarm about a trend they say is worsening across the U.S.

Still, it's unclear if the seemingly common "flash mob" thefts are actually increasing — or if they're simply getting more attention in the press and on social media. According to UC Berkeley law professor Jonathan Simon, images of the large-group thefts can provoke a strong reaction from the public, whether the numbers are up or not.

While the National Retail Federation doesn't specifically track "flash mob" thefts, the group says all forms of theft are up. npr.org


OSINT Becoming Critical as More Crime is Organized Online
How to Scale Investigations Using Open-Source Intelligence
Modern investigations into today’s most sophisticated criminal activity involve a variety of tactics, including the analysis of both physical and digital evidence.

With so much more organized crime being coordinated online, open-source intelligence (OSINT) has become a critical element of the investigative process. And with so much publicly available information online to work through, it’s important to help a broader range of professionals understand where OSINT fits into the investigative workflow, and how to properly scale short-term and long-term investigations.

Whether you are a member of law enforcement, or part of a security team within a private organization, online artifacts must not be overlooked. Having a method to the madness is key as investigators look to integrate OSINT more thoughtfully into their investigative workflows. To do so, they need to know when, where, and how to add the collection of online and publicly available information into their process to translate it into valuable intelligence. asisonline.org


NYPD’s 111th Precinct touts reduced crime, DA promotes retail theft program during Bayside meeting
Robberies were up 186% at the end of 2022 and are now down 23%, while felony assaults were up 27% and are now up just over 1%. The decrease in grand larcenies, which were up 65.2% and are now up by 1%, was also celebrated. Porto attributes the decline to catalytic converter theft slowing down in the area, but insists that it is still a rampant issue. qns.com


House ORC Bill Gets More Cosponsors
H.R.895 - Combating Organized Retail Crime Act of 2023
Two new co-sponsors signed onto the legislation (2 Democrats), bringing the total to 75 cosponsors (39 Democrats, 36 Republicans). It's picking up activity.


Las Vegas police tackling organized retail crime

Persistent retail theft trend continues in DMV as stores see emptier shelves

How a Staunton, VA business handles store theft

Man charged in 2021 Colorado supermarket mass shooting ruled mentally competent to stand trial

Is Self-Checkout Fizzling Out?
Retailers appear to be facing a self-checkout reckoning

Retailers hoped to save big on labor costs by introducing self-checkout lanes, but recent moves from the biggest retailers suggest it's proving harder than expected.

Retailers including Costco, Walmart, and Kroger are rethinking some of their self-checkout strategies. Some are finding they still need employees to combat theft, assist with purchases, review IDs, and check receipts.

Costco, for example, has started asking staff to check membership cards in the self-checkout lanes, as well as assist with scanning items. Walmart said last week it was pulling self-checkout from at least three stores in Albuquerque, New Mexico, and replacing the lanes with traditional staffed registers.

Kroger, meanwhile, is going all in on self-checkout in at least one store where it's no longer offering traditional registers. But Kroger told Retail Dive the change didn't result in labor cuts, and it still had front-end staff to assist with scanning and bagging groceries.

Industry estimates suggest inventory losses can rise by 31% to 60% — or more — depending on the number of self-checkout stations used in a store.

Matt Kelley, a loss-prevention expert who worked in asset protection at Home Depot, told Insider last year that self-checkout forced retailers to make a trade-off between labor-cost savings and the increased expense of theft.

Christopher Andrews, a Drew University sociologist who wrote "The Overworked Consumer," told CNN last year that, far from being the autonomous money collectors retailers were hoping for, self-checkout stations required supervision, maintenance, and IT support. businessinsider.com


500+ Walgreens Store Walkouts
Walgreens pharmacy walkouts: Some pharmacies might be closed this week
Employees at two of the largest drugstore chains in the United States say harsh working conditions make it difficult to safely fill prescriptions, which could put the health of their customers at risk. Now, they're demanding change by staging a series of walkouts across the country.

Pharmacy employees at some Walgreens stores, including pharmacists, technicians and support staff, are planning a walkout between Oct. 9-11, an organizer, who asked to remain anonymous for fear of retribution from the chain, confirmed to CNN. Some employees plan to walk out for just one day, while others expect to shutter their pharmacies for all three days.

Employees at more than 500 of America's approximately 9,000 Walgreens stores across the United States have expressed interest and solidarity, a Walgreens pharmacy employee and walkout organizer said, though fewer will likely end up participating.

The planned action comes after pharmacy employees walked off the job at multiple CVS stores in the Kansas City area last week.

The coordinated action at some Walgreens stores is in response to what pharmacy employees call burdensome prescription and vaccination expectations levied on pharmacists from corporate management, according to the organizer. As a result, employees often find themselves falling behind and dealing with angry customers. abc7chicago.com


Slowest Holiday Season for Retail Since 2018?
What Do This Year’s Holiday Hiring Expectations Mean for Retail?
Reuters reports that Macy’s plans to hire at least 38,000 employees for the 2023 holiday season, but this number is lower than last year’s hiring force, which was estimated at 41,000, and lower still than the 76,000 workers hired in 2021. Levels this low were last seen in the financial recession of 2008, according to a report by Challenger, Gray & Christmas, a global outplacement and career transitioning firm.

Bain & Company also “forecasts US retail sales to grow by 3% this holiday season, the lowest holiday growth rate since 2018.” According to their data, this would mean that US holiday retail sales growth remains below the 10-year average after being adjusted for inflation.

Furthermore, “US retail sales have been relatively slow in 2023, up 4.0% YoY, on a nominal basis,” and Bain & Company found that “growth has largely come from e-commerce, along with select in-store categories, such as health & personal care, general merchandise, and food & beverage.”

This paints a gloomy picture, as Reuters also estimates that this will be the slowest holiday season for retail since 2018. Student loan repayments are coming back into play, and many consumers are unsure of how inflation will continue to affect them as gas prices keep rising. retailwire.com


California Enacts Law Banning Hidden Fees, Providing Transparency for Consumers
California Governor Gavin Newsom has signed a new bill, SB 478, into law, making it illegal to impose hidden charges on purchases. The legislation, proposed by state Senator Bill Dodds, targets “junk fees” that are not transparently displayed in advertising, deeming them a deceptive business practice. The law will be effective from July 1, 2024, ensuring consumers in California are informed about the full costs upfront. retailwire.com


Stitch Fix to lay off 558 in Dallas as it carries out distribution center closures

Freddy’s to open 60 locations in 2023

Convenience Store Chain Donates Inventory After Closure of Several Stores

In this special Travel edition of Tom's Tek Tips, Tom Meehan, CFI will cover essential cybersecurity and tech tips to get the most out of your tech while staying secure amidst traveling and the upcoming fall trade show season.

Tip #6 - Check Roaming Charges: Investigate your mobile carrier's international roaming charges before you travel. Understanding these fees can help you avoid unexpected costs on your bill. If you plan to use significant data, consider a local SIM card for more cost-effective access.
 

DOJ: Leader of $7M International Gift Card Fraud Scheme Convicted
ALEXANDRIA, Va. – A federal jury convicted a Chinese national residing in Washington, D.C. yesterday on charges of conspiracy, access device fraud, money laundering, and aggravated identity theft.

According to court records and evidence presented at trial, Qinbin Chen, 29, masterminded a criminal conspiracy that obtained, trafficked, used, and laundered gift cards and debit cards purchased by victims, who were mostly elderly, from across the United States. The victims were manipulated into buying Walmart gift cards by fraudsters who told the victims a range of lies,

The victims sent the gift cards to fraudsters who soon transferred them to Chen. Chen employed conspirators runners to use the Walmart gift cards to buy other gift cards. Chen then sold those “clean” gift cards to overseas buyers. Though Chen reported little legitimate income, his bank accounts showed hundreds of thousands of dollars in incoming international wires. Evidence at trial suggested that Chen trafficked about $7 million in fraudulently obtained gift cards.

Chen faces a mandatory minimum of two years in prison and a maximum penalty of 20 years in prison when sentenced on December 18. justice.gov

In Case You Missed It - Related Case: Four Telephone Scammers Used Target Stores Gift Cards to Fund & Launder Fraudulent Proceeds


Pinellas County, FL: Update: A Florida pastor has been accused of running an organized retail crime ring and hawking $3 million worth of stolen items online
A Florida pastor has been charged with running an organized retail crime ring, where he's accused of pocketing millions from selling items his associates stole from Home Depot online. Robert Dell, a Pinellas County preacher, is accused of operating a multimillion-dollar theft ring and faces charges including racketeering and dealing in stolen property, per a press release from Florida's attorney general office in August. According to the press release, Dell used his former positions as a pastor at The Rock Church and director of a halfway house for recovering drug addicts to threaten and manipulate people to steal for him. The investigation revealed that Dell's co-conspirators stole from Home Depot stores five to six times daily, per the press release. The press release added that stolen items were then sold under Dell's eBay account, "Anointed Liquidator." Besides Dell, four other associates, including Dell's wife and mother, were identified and charged as co-conspirators. The 57-year-old sold $3 million worth of stolen items online since 2016, The Wall Street Journal reported on Saturday, citing Home Depot, as well as a search warrant affidavit it had seen. Scott Glenn, Home Depot's vice president of asset protection, told The Journal that the number of thefts in Tampa has dropped after Dell and his associates were charged. Glenn, however, wasn't too hopeful that things would get better from here. "Somebody else will rise up and probably start doing this in the absence of this group that was busted," Glenn told The Journal.  businessinsider.in


Fraudster Gets Prison for $742K Amazon Shipping/Refund Fraud
DOJ: Shelton, Conn., Man Gets 18 Months Prison for Defrauding Amazon
OSHANE STEWART, 31, of Shelton, was sentenced to 18 months of imprisonment, followed by three years of supervised release, for defrauding Amazon.com, Inc. (“Amazon”).

Stewart created multiple vendor accounts with Amazon allowing him to sell merchandise through the website on a third-party basis. He often opened the accounts using false names, email addresses and other identifying information. After setting up the accounts, Stewart represented to Amazon that he was shipping it valuable merchandise to be held for sale by the company. In reality, he would not ship the merchandise, and would later falsely claim that it had been lost, supporting his false claims with fabricated documents. Amazon sent Stewart a series of refunds for the purportedly lost merchandise.

Through this scheme, Stewart defrauded Amazon of approximately $742,231.16. Judge Thompson ordered him to pay full restitution.

On November 8, 2022, Stewart pleaded guilty to one count of wire fraud.

Stewart who is released on bond, is required to report to prison on December 5.

Two other individuals have pleaded guilty to charges in connection with this scheme. On February 10, 2022, Stewart’s brother, Kenoy Stewart, pleaded guilty and admitted that his conduct resulted in a loss to Amazon exceeding $1 million. Rajhni Yankana pleaded guilty on August 26, 2022. Each awaits sentencing. justice.gov

In Case You Missed It - Related Case: Three Online Fraudsters Get Prison for $1.9M Amazon Shipping/Refund Fraud
 

Prince Georg’s County, MD: 3 people arrested in Maryland in connection to an organized theft ring
The Prince George’s County Police Department has arrested three suspects in connection to what they call an organized theft ring. The suspects have been identified as 19-year-old Quassan Parker, 26-year-old Tyquan McKenzie, and 18-year-old Donyae Parker, all from District Heights, Maryland. On Wednesday, officers noticed an SUV that was flagged in connection to multiple thefts. When officers pulled the SUV over, Quassan was behind the wheel. He was immediately taken into custody. A short while later, the others were arrested as well. Records show the three lived together in an apartment off of Brooks Drive. Law enforcement obtained a search warrant for the home where they reportedly found thousands of dollars worth of merchandise. During the investigation, officers learned of a second home linked to the suspects. Once they obtained a search warrant for that residence, officers say they found even more stolen items. The thieves were selling the stolen merchandise online or from referrals, according to police. Officers recovered over $10,000 worth of merchandise from both homes. The thieves are being charged in connection to 10 thefts that occurred between September 13 and October 1. Investigators say this is an ongoing case and additional charges could be added.  wusa9.com


Manhattan Beach, CA: California Jewelry store worker starts shooting at smash-and-grab robbers
A jewelry store employee in California thwarted a smash-and-grab attempt Saturday when the worker began shooting at the people trying to pillage the store. The incident occurred at about 12:40 p.m. when police responded to Prestige Jewelers in Manhattan Beach, according to a report. Officers arrived on the scene and learned an employee had held their ground against a band of at least five suspects while they tried to rob the store. "Five suspects, who were described as wearing hooded sweatshirts, used hammers to smash the jewelry showcases," a Manhattan Beach Police Department statement read. "An employee of the store responded by using a firearm to shoot towards the suspects." Once the employee began shooting at the criminals, they fled the store and hopped into vehicles parked outside, the report noted. No injuries related to the incident were reported, and authorities are searching the area for the suspects, according to the report. The value of the jewelry taken during the smash-and-grab has not been confirmed.  abc7.com


Notorious Joliet Shoplifter Faces 9 Felony Charges, nearly $4000 in merchandise stolen
A 44-year-old Joliet man who stole thousands of dollars worth of merchandise from Jewel, Walmart, Walgreens, PetSmart and Hobby Lobby is now in the Will County Jail facing nine counts of felony retail theft, Joliet police announced. Monte Alexander was brought to the Will County Jail on Tuesday, Oct. 3, where's being detained on a $250,000 bail. Cash bail is in place for Alexander because Joliet police obtained the warrants for his arrest prior to the new law that abolishes cash bail for Illinois defendants.  patch.com


Irvine, CA: Man arrested for selling Nikes and clothes stolen during smash and grab O.C. robberies
Last Wednesday, the Irvine Police Department arrested four grab-and-run shoplifters who targeted a Nike store. They were responsible for multiple retail theft cases throughout Southern California. Yesterday, Irvine Detectives located and arrested the man who was purchasing and reselling the stolen items at his clothing store. Irvine police detectives recovered over $6,200 worth of stolen shoes and clothing. The recovered property is being returned to the victim companies. Harold Carter, 36, of San Bernardino, was arrested and booked at Orange County Jail.  newsantaana.com


UK: Neitherfield, England: Prolific thief jailed after stealing handbags worth $700 from Netherfield TK Maxx store
 

NRF has declared Oct. 26 as Fight Retail Crime Day

 A day of action to unite the retail community to advocate for solutions in combating organized retail crime.