U.S. big box stores have experienced an upward surge in incidents of theft over the past financial quarter, suffering further inventory shrinkage as a result. This problem is compounded by other incidents such as organized crime, damage, vendor fraud, and lost items.
Home Depot, Target, and Walmart all admitted that theft has become a major issue affecting their businesses following all three big box stores’ latest earnings calls. Target CEO Brian Cornell stated that his company is facing “an unacceptable amount of retail theft and organized retail crime.”
Inventory shrinkage, caused in part by theft, has had a significant effect on companies’ profit margins this year, with Home Depot CFO Richard McPhail citing this as the main factor for his company’s gross margin decline. Still, this is not a new issue, with the National Retail Federation’s (NRF) National Retail Security Survey finding that retail shrink was nearly $100 billion as of 2021; the most recent year that the data was collected.