Target Corporation reported its third quarter results today. The report wasn’t good, in large part because Target stores are being robbed left and right:
Target stores are getting looted, and it’s taking a huge bite out of profits.
The discount retailer told reporters on a call to discuss its third quarter earnings results that inventory shrinkage — or the disappearance of merchandise — has reduced its gross profit margin by $400 million so far in 2022 compared to 2021.
Target said that it expected “shrinkage” to amount to more than $600 million for the full year. What is going on?
A Target spokesperson told Yahoo Finance via email after the call the shrinkage was mostly specifically attributed to “organized retail crime.”
Organized retail crime is when dozens of criminals descend on a store and loot it. Store employees are almost always told not to interfere, and police rarely do anything. In California, theft has been more or less legalized up to $950. It is a misdemeanor, which means it is rarely prosecuted. Major retail chains have closed their operations in San Francisco, among other cities, because they were helpless against teams of organized looters.
Looters don’t consume the stolen property themselves, they sell it on Amazon or other services. This is why it is “organized retail crime.” More from the same link:
Organized retail crime is not just a Target issue as it has impacted other big name retailers such as Best Buy and Rite-Aid. From Yahoo Finance Editor-in-Chief Andy Serwer earlier this year:
Why are people stealing these days? That’s a tough one.
Because they always get away with it? Because our culture relentlessly mocks old-fashioned virtues like, not being a thief?
To some degree it’s a reflection of our times. Simply put, America’s social contract is straining. Until recently we’ve been able to lay out goods—often in mammoth, big box stores with only a handful of employees. When our social contract is strong—i.e people are getting a fair shake—it’s a model that works.
Oh, please. Many billions of dollars in “organized retail crime” because people aren’t getting a “fair shake”? What absurdity.
Now it seems more people are stealing instead.
Yes. How much are they stealing? For the nine months ending October 29, Target reported net earnings of $1.9 billion. That means that 21 percent of Target’s profit was stolen by brazen thieves, due to a lack of law enforcement and cultural decline.*
I am not sure why companies like Target–and, to be fair, every other major retailer–is willing to stand for this. My guess is that they find the issue of “organized retail crime” to be racially sensitive, and, being thoroughly woke, they would rather not talk about it, or do anything about it. Other than quietly abandon communities. And I suppose they rationalize that the cost of organized theft will ultimately borne by the rest of us–shoppers who don’t steal–in the form of higher prices.
This is another sign of a great sickness in our society that, for some reason, we seem helpless to deal with.
* The numbers are a little unclear. Target described the $400 million as an increase over 2021, and organized retail theft was going strong in 2021, too. So the total amount lost presumably is considerably greater than that.
** On further review, the $400 million was a reduction in gross profit, while the $1.9 billion was net. So you would need a more detailed look at the data to calculate the percentage of profit lost to theft. It is, in any event, an enormous amount of money.