As a direct result of retail theft, Walmart is reportedly considering closing stores and raising prices. CEO of Walmart Doug McMillon recently told CNBC, “They have a problem with theft. It’s above average compared to past years. Prices will rise and/or businesses will close if this continues. Theft from stores like Walmart and Target has become an increasingly serious issue in the United States. Executives have pointed fingers at both organized crime and lenient prosecutors for the thefts that have occurred. The widespread nature of the problem is having an effect on retail profits and may necessitate major changes to the retail industry as a whole.
CVS, Rite Aid, and Walgreens stores across the country closed in the late year 2021 due to an epidemic of retail theft and widespread looting. CVS plans to close 900 of its stores between 2021 and 2024, which amounts to about 9 percent of its total of 10,000 stores. In an effort to get back in the black, Rite Aid has announced that it will be closing 63 stores; Walgreens has closed five stores in San Francisco alone due to a dramatic increase in shoplifting. CEO Doug McMillon expressed concern that some prosecutors’ lax approach could have an effect on prices and ultimately result in the closure of stores.
McMillon put it this way: “It’s really city by city, location by location.” “Our store managers collaborate with their communities’ law enforcement agencies, with whom we have excellent relations. Executives in the retail industry have been advocating for increased cooperation between businesses and law enforcement to combat shoplifting. To prevent theft and protect their customers and employees, some have advocated for stores to install more security features like video monitoring and armed guards. Others, however, think it’s more important to get to the bottom of things and figure out why people steal from stores in the first place, rather than just trying to fix the symptoms.
Large-scale retailers such as Walmart and Target are not alone in dealing with the problem of retail theft. Theft has a devastating effect on a company’s bottom line and can threaten its very existence. When theft occurs, it can force small businesses to raise prices or even close their doors. Small businesses are often the lifeblood of their communities, both in terms of employment and economic activity, so this can have a significant negative effect on these areas.
Better security measures, cooperation between retailers and law enforcement, and a focus on the root causes of retail theft are all things that have been suggested as possible solutions to the problem. While the exact measures Walmart and other retailers will take to combat retail theft remain unknown, it is evident that this issue must be resolved for the retail sector’s long-term health and profitability.
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