NEW YORK — Target is witnessing a rise in "violent" incidents at its stores that is costing the retailer hundreds of millions each year, CEO Brian Cornell said on Wednesday.
The retailer isn't alone in experiencing an increase in thefts and other problems, Cornell said on a conference call to discuss Target's most recent quarterly earnings. "[T]heft and organized retail crime are increasingly urgent issues, impacting the team and our guests and other retailers," he noted.
Shoppers are sometimes "in harm's way," he added.
The rise in theft and other incidents at Target locations comes as other stores are also struggling to cope with similar issues. Whole Foods last month temporarily closed one of its flagship stores in San Francisco, citing concerns that crime in the area is endangering its staff. During the pandemic, a rise in so-called smash-and-grab retail robberies impacted retailers across the U.S., with organized theft rings targeting major chains.
"The unfortunate fact is violent incidents are increasing at our stores and across the entire retail industry. And when products are stolen, simply put, they are no longer available for our guests who depend on them," Cornell said.
While he didn't single out any particular store or region that was impacted more heavily, Cornell noted that higher theft rates is "putting significant pressure on our financial results." He forecast that theft would reduce Target's profitability by more than $500 million this year when compared with the prior year.
"Epidemic" of shoplifting
Still, some analysts expressed skepticism over whether retail theft, also known as "shrink" by the industry, is as big of an issue as Cornell portrayed it. Consumers, they say, are paring back spending amid economic headwinds and Target may be struggling with its own issues.
"The company called out shrink as eroding profitability; while we accept theft is a growing issue, we also wonder how much of this is down to poor inventory control by Target," noted Neil Saunders, an analyst at GlobalData, said in a Wednesday research note.
Saunders added that consumers are cutting back on spending outside of groceries, and trading down to cheaper options because they are "less willing and able to spend."
As for the thefts, Cornell said Target is moving forward with "mitigation efforts," including fixtures that protect its goods and changing its merchandise selection.
"Retailers are dealing with epidemic levels of shoplifting," David Johnston, vice president of asset protection and retail operations for the National Retail Federation, told CBS News recently. "Someone who sweeps a shelf of Tide detergent ... that's not for personal consumption. They are being used as a mechanism of a larger criminal enterprise."