Retailers lost about 1.4% of their revenue — or about $94.5 billion — due to theft in 2021, according to estimates from the National Retail Federation.
Walmart Chief Executive Doug McMillon said on CNBC that prices could increase, stores could close or a combination of both could happen. He also said that criminals are not being prosecuted for stealing items under a certain dollar amount. (RELATED: ‘I Have No Empathy’: Gov. Newsom Lambasts Local Officials For Letting Shoplifters Off The Hook)
🇺🇸 Shoplifting has reportedly become a $94.5B problem for US retailers
— Neil Saunders (@NeilRetail) December 23, 2022
Retail theft grew at a compound annual growth rate of 7% from 2014 to 2019, according to the National Retail Federation, The Wall Street Journal reported. It jumped 47% in 2020 and 4% on top of that in 2021, according to the data, per the Journal.
“When times get tough, shrink goes up,” Ulta Beauty Chief Financial Officer Scott Settersten said on the company’s earnings call on Dec. 1, according to the Journal. Shrink is an industry term for loss of inventory, the Journal noted.
The rise in shrink reduced Target’s gross profit by more than $400 million in the first three quarters of fiscal year 2021, the Journal reported. In November, Dollar Tree said that shrink and inflation took one percentage point off its margin in the most recent quarter. The company’s total operating margin was 5.5% for the quarter.