One major issue dominated Dick’s Sporting Goods’ earnings report on Tuesday as it revealed a poor quarter: retail crime was eroding profits.
Organized thieves targeted a Nordstrom store
A report from Footwear News stated that this admission comes after a wave of criminal behavior. Just this month, organized thieves targeted a Nordstrom store inside the Westfield Topanga mall outside of Los Angeles and made off with $100,000 worth of merchandise; weeks after police broke up a crime ring targeting the store, thieves stole $1,000 worth of shoes and clothing from Nike’s east Los Angeles community store; and Portland police apprehended 25 suspects as part of a sting operation targeting retail thieves.
According to the National Retail Federation (NRF), these incidents only make up a small portion of the approximately $100 billion problem the retail industry is currently experiencing. The NRF discovered that shrink, or inventory lost to damage or theft, represented $94.5 billion in losses in 2021, up from $90.8 billion in 2020, according to its most recent annual Retail Security Survey. The survey also revealed that during the same year, violent and aggressive occurrences related to organized retail crime increased by an average of 26.5 percent at retail establishments.
According to Jason Straczewski, vice president of government relations and political affairs for the NRF, organized retail crime, retail theft, and acts of violence connected to those occurrences have all grown recently, which is very worrying. It has an effect on how stores operate. Protecting our customers, employees, and assets will require a major expenditure of resources. NRF’s primary objective is to stop this activity.
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Hobart: Theft and organized retail crime becoming a more severe problem for many shops
Despite all, a lot of retailers are still vocal about the problem since stealing eats away at their profits. On the company’s most recent results call on Tuesday, Dick’s Sporting Goods CEO Lauren Hobart informed analysts that higher inventory shrink had a negative impact on the company’s profits in the second quarter.
Hobart stated on the call yesterday that theft and organized retail crime in general are becoming more of a severe problem for many shops. Based on the outcomes of our most recent physical inventory cycle, we can conclude that the impact of theft on our shrink was significant for both our second quarter results and our projected future shrink for the rest of the year.
When pushed further by analysts, Hobart said that shrink is both a national issue and a “industry level problem.” In order to continue addressing the shrink issue, Hobart continued, we all need to work together with our partners, trade organizations, and government. We’ve all heard the stories, and what’s happening is very disturbing.
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