Target Announces Closure of Nine Stores Amidst Citing Theft Concerns: A Blow to the Retail Giant

Target announced on Tuesday that it will be closing nine stores across four states due to theft and safety concerns for employees and customers. This decision includes the closure of a store in Manhattan’s East Harlem, which has been open since 2010, as well as multiple locations in San Francisco, Seattle, and Portland, Ore.

In a statement, Target expressed the importance of a safe working and shopping environment and acknowledged the role its stores play within their communities. The retailer has been addressing the issue of theft, especially organized retail crime, where a significant amount of merchandise is stolen for sale on the black market.

During an earnings call in August, Target’s CEO, Brian Cornell, highlighted the company’s ongoing struggle with retail theft and organized retail crime. He mentioned that thefts involving violence or threats had increased by 120% in the first five months of the year. Other retailers, including Macy’s and Dick’s Sporting Goods, have also expressed concerns about the impact of theft on their businesses.

The National Retail Federation’s annual survey revealed that shrink, which refers to the value of merchandise disappearing from stores without payment, increased to 1.6% of sales in 2022 compared to 1.4% in 2021. Theft accounted for 36% of shrink, while employee theft and process/control failures and errors contributed 29% and 27%, respectively.

While the overall shrink rate remained similar to previous years, retailers expressed greater concern about theft. Two-thirds of respondents reported an increase in violence and aggression from those involved in organized retail crime.

Target’s CFO, Michael Fiddelke, warned that if the shrink trend continues, the company could lose $500 million in profit. To combat theft, Target has increased security measures, including the use of third-party guard services.

Retail workers from various unions have reported an increase in unruly customers and acts of crime, including assaults, since the start of the pandemic. However, some industry experts caution that reliable data on this topic is lacking. Retailers often highlight shrink during times of economic distress, and incidents taking place in stores are not publicly reported.

There have been cases where retailers later acknowledge that their concerns about shoplifting were exaggerated. Walgreens, for instance, admitted in January that they may have overreacted to the issue of theft.

Executives who have spoken out about theft and organized retail crime are calling for help from government officials and law enforcement. Target has urged officials to support a bill in Congress to create a task force addressing retail crime. The company is also engaging with government officials, including members of Congress, to educate them about their efforts to combat the issue.

Target has emphasized that while some stores are closing, there are nearby locations for customers to shop. The retailer is offering job opportunities at other Target locations to eligible employees affected by the closures. The stores are scheduled to close on Oct. 21.