HomeBusinessRetail theft could lead Walmart to close stores, raise prices
Retail theft could lead Walmart to close stores, raise prices
December 7, 2022
Shoplifting has gotten so bad at Walmart stores that the retail giant may shutter locations in areas where local governments are taking a soft-on-crime approach, the company’s boss said.
CEO Doug McMillon, who has led Walmart since 2015, confirmed the retailer has experienced an increase in “shrink” — a term the retail industry uses to address losses related to in-store theft or fraud.
“Theft is an issue. It’s higher than what it has historically been,” McMillon said during an appearance on CNBC’s “Squawk Box” on Tuesday. “We’ve got safety measures, security measures that we’ve put in place by store location.
“I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it,” McMillon added. “If that’s not corrected over time, prices will be higher, and/or stores will close.”
The Walmart CEO did not elaborate on how many stores could be in danger of closure, or where the closures might occur. The Post has reached out to the company for further comment.
Walmart has 4,720 stores in the US and 10,586 locations around the world.
McMillon added that Walmart takes a “city by city” and “location by location” approach to how it handles shoplifting.
“It’s store managers working with local law enforcement and we’ve got great relationships there for the most part,” he said.
Walmart’s top boss is the latest executive to warn of significant impact from what is often described as “organized retail crime.”
Last month, Target CFO Michael Fiddelke said shrinkage had already shaved $400 million from the company’s profits – with the final impact expected to rise to more than $600 million for the full year.
Target CEO Brian Cornell added that his company had “seen a significant increase in theft and organized retail crime across our business.”
As The Post reported in September, Rite Aid executives grumbled that shoplifting in New York City had contributed to “unexpected headwinds” and resulted in a $5 million year-over-year increase in shrink-related losses.
“I think the headline here is the environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city,” Rite Aid’s chief retail officer Andre Persaud during an earnings call at the time.