The spreading threat of organized retail crime
Giant Foods, a supermarket chain with 165 stores in the Mid-Atlantic is taking new measures to prevent retail crime.
With locations in Washington, D.C.; Delaware; Maryland; and Virginia, the company is hiring more security guards, limiting the number of items that can be bought at self-checkout kiosks, and keeping high-end items off shelves.
Company President Ira Kress told The Washington Post that he’s seen theft rise at least “tenfold in the last five years” and violence increase “exponentially.”
This is just one of the latest retailers who are taking new precautions and stepping up efforts to combat rising retail crime.
“Organized retail crime (ORC) is a growing problem for all retailers and The Home Depot is fighting it on all fronts,” said Evelyn Fornes, senior manager of communications and advocacy at The Home Depot. “We’ve seen a significant increase in ORC-related activity over the last several years.”
In June, the National Retail Federation (NRF) said the results of a survey showed that more than half (53%) of consumers believe retail crimes such as shoplifting and looting stores have increased in their community since the onset of the pandemic.
The survey also found that nearly two-thirds (64%) of consumers are concerned about gang-led shoplifting in their community, with the figure rising to 75% among consumers who live in urban communities. Three-quarters (75%) of consumers have personally shopped in stores where products were kept in locked cabinets to avoid theft while 79% of consumers believe retail theft impacts the price of goods that they buy.
Whole Foods in downtown San Francisco closed its doors less than a year after opening. And they aren’t alone. The city has witnessed a massive wave of retail crime that has resulted in Nordstrom, H&M, Saks off 5th, and Abercrombie & Fitch — among others — all announcing they have left or will be leaving the market in the next several months.
In April, Walmart announced the closing of four of its Chicago stores. In a statement issued by the retailer, Walmart said, “These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years.”
“Organized retail crime is growing as a real threat to the safety, operations, and bottom line of retailers across the nation and now forms a part of the criminal and illicit financing landscape,” said Juan Zarate, global co-managing partner and chief strategy officer at K2 Integrity, a global risk advisory firm based in New York.
“These concerns have grown in recent years, as criminal groups have become more brazen and violent in their tactics and are using new channels to resell stolen goods,” Zarate said. The new channels include e-commerce platforms.
A report published by the U.S. Chamber of Commerce indicated that organized retail crime cost more than $700,000 per every $1 billion in sales — a more than 50% increase compared to the previous five years. Additionally, according to new data from the Chamber, 56% of small retail businesses say they have experienced theft in the past year, and 46% have been forced to increase prices due to shoplifting.
In its annual Security Survey, the NRF said its report found that retail shrink is “an almost $100 billion problem."
Findings from an Organized Retail Crime study, also issued by the NRF earlier this year, showed that ORC groups largely target everyday consumer goods — which offer a favorable balance between ease of theft, monetary value and ease of resale. Only 11% of the ORC groups examined in the report targeted luxury goods.
The Home Depot says its investigative team — made up of “highly trained associates” — continues to learn new crime prevention techniques on an ongoing basis.
“We’ve increased security measures to address shoplifting and organized retail crime while understanding that we don’t want to impact the shopping experience of our customers,” Fornes told HBSDealer. “We use an ever-evolving playbook of theft-fighting technologies.”
But there is a darker side to retail crime, which has resulted in the death of two Home Depot associates.
This past April, Blake Mohs, a 26-year-old Home Depot employee in the retailer’s loss prevention department, was shot and killed after trying to prevent the theft of electric tools at the retailer’s Pleasanton, California store. The store is located in Amador Valley, a suburb in the East Bay region of the San Francisco Bay Area.
At the Home Depot’s Hillsborough, North Carolina store, Gary Rasor, 83, was shoved to the ground last October after he approached a man wheeling out three pressure washers worth over $800. On Dec. 1, Rasor died from complications caused by his injuries.
In an interview with ABC News, Home Depot’s vice president of asset protection, Scott Glenn, said theft at the big box retailer has been “growing double-digit year over year.”
“More and more we’re seeing the risk being brought into the stores, and people being hurt or people even being killed in many cases because these folks, they just don’t care about the consequence,” Glenn said.
The Home Depot is a member of the Buy Safe America Coalition which represents a diverse group of responsible retailers, consumer groups, manufacturers, intellectual property advocates, and law enforcement officials who support efforts at all levels of government to protect consumers and communities from the sale of counterfeit and stolen goods.
The retailer has also grown its organized retail crime investigative and broader asset protection teams significantly, Fornes said.
In the Southwest, McCoy’s Building Supply has also witnessed a crime surge in recent years.
“We are cognizant of these situations, and that organized retail crime, if not prevented, can be very consequential,” said David Paul Strom, director of loss prevention and operations support at McCoy Corporation.
Strom says McCoy’s has increased both its store security force and communication between stores in regard to crime. And with some metro markets seeing higher crime rates than others, Strom said the prodealer and farm and ranch retailer has adjusted its loss prevention techniques “accordingly.”
Organized retail crime is not relegated to metro markets either.
“ORC is a problem across the country,” Fornes said. “Not only are there rings that are based in specific areas, but we also encounter ORC rings that travel across the country and even internationally.”
“The issue stretches from cities to the suburbs and even more rural areas,” Fornes added.
