Why are US stores keeping toothpaste and deodorant under lock?

Many stores in the United States now appear to be fortresses. Major retailers including Walmart, Target, CVS, Walgreens, Home Depot, and Foot Locker, have begun placing everyday products like toothpaste, chocolate, washing powder, and deodorant under lock and key at their outlets. The reason: a reported rise in petty theft and organised shoplifting as the country grapples with the cost of living. According to Walgreens and Rite Aid, the problem of organised retail crime — rings of thieves who steal merchandise from stores and typically resell them on internet marketplaces — is forcing companies to lock up more products and close some stores. “Organised retail crime, and theft in general, is an increasingly serious issue impacting many retailers,” said Lauren Hobart, chief executive at Dick’s Sporting Goods during a conference call. The impact of stealing on the company’s inventory was “meaningful” on both its second quarter results and expectations for the balance of the year, she added. Dick’s now expects earnings per share for the year at $11.33 to $12.13 (Rs 936-1,002), down from earlier guidance of $12.90 to $13.80 (Rs 1,066-1140). However, it’s a source of irritation for both shoppers and employees who must walk around the store with keys at the ready. Locks on shelves, padlocked chains on refrigerators “During the first five months of this year, our stores saw a 120 per cent increase in theft incidents involving violence or threats of violence,” said Target chief executive Brian Cornell in a separate briefing. “Our team continues to face an unacceptable amount of retail theft and organised retail crime,” he said. He noted a loss of inventory well above what is sustainable over the long term. This comes as interest rates have surged from close to zero to around 5.5 per cent over 18 months —the highest level in 22 years — as policymakers seek to curb inflation. Higher lending costs make it pricier to borrow funds for big ticket purchases, or for companies to expand their businesses — and consumers have been feeling the squeeze. According to the National Retail Federation’s 2022 retail security survey, retailers lost an estimated $94.5 billion (Rs 7.81 lakh crore) nationwide to “shrink” in 2021 alone. Retail shrink means the loss of inventory from factors including staff theft, shoplifting or administrative errors. The survey also noted that retailers on average saw a 26.5 per cent rise in organised retail crime in 2021, with a majority of respondents reporting that the pandemic has led to an increase in risks. As a result, stores have been installing transparent walls with locks on shelves, sometimes padlocked chains on refrigerators, and scattering call buttons in aisles for staff. Unprotected shelves are often sparsely stocked as well, to limit shoplifting. Theft and violence are getting worse But such security measures are not always an effective deterrent. In June, a man in a hooded jacket and face mask used a blowtorch — in full view of customers and employees — to melt locked cases at a Walgreens outlet in Queens, New York. He then filled a bag with products and left without paying, according to media reports. [caption id=“attachment_13073602” align=“alignnone” width=“640”] According to the National Retail Federation’s 2022 retail security survey, retailers lost an estimated $94.5 billion (Rs 7.81 lakh crore) nationwide to “shrink” in 2021 alone. AFP[/caption] Residents in Queens have also launched a petition surrounding unsafe conditions in several CVS outlets. According to media reports, some retailers are asking their staff not to intervene in the event of theft and not to contact the police, for their own safety. Some are considering closing sites, with Giant mulling the closure of a Washington supermarket where theft and violence “is significant, and getting worse.” It is becoming increasingly difficult to operate under these conditions, a spokesman told AFP, adding that other locations were also affected. Shoplifters frequently target smaller items with higher price tags, known as “hot products,” which stores usually lock up. The most often stolen items in US stores are cigarettes, health and beauty products, over-the-counter medications, contraception, alcohol, teeth-whitening strips, and other items. As per CNN, a criminologist coined the acronym CRAVED to describe the most dangerous items: “concealable, removable, available, valuable, enjoyable, and disposable.” Closures due to “flash rob” incidents Walgreens closed five San Francisco stores in 2021 due to theft, while Walmart shuttered four Chicago outlets this year, officially due to a lack of profitability. “Shrink has increased a bit this year. It increased last year. It’s uneven across the country,” noted Walmart chief financial officer John Rainey in mid-August. “We don’t want it to go up obviously because it could cause prices to rise,” he added. But online users are reporting more “flash rob” incidents where a group surges into a store, seizes items within reach and runs off. On 12 August in a Nordstrom store in Los Angeles, around 30 masked people stole more than $300,000 (Rs 2.47 crore) worth of luxury items and used bear spray on a security guard, according to the police. Irritated customers “Consumers understand why you have to lock up a fur coat or jewellery. But they say ‘why are we locking up deodorant?’” said Jack Trlica, co-founder of trade publication LP Magazine, reports CNN. According to the CEO of one anti-theft gadget business, locked up items can result in 15 per cent to 25 per cent sales declines. Shoppers today are more impatient. Instead than waiting for a worker, some will leave and purchase the items online. Stores, on the other hand, are exploring new means of safeguarding inventory while reducing customer annoyance, such as a new form of case that any employee can unlock with a smartphone. In other cases, shoppers must enter their phone number to open or scan a QR code. Trlica expects companies will develop new technologies that protect products but don’t require flagging down an employee to unlock a shelf. “There’s going to be an evolution of security products,” he told CNN. With inputs from AFP