Target Corp.’s recent announcement to close nine stores across four states is a testament to the ongoing struggle the retail industry faces against theft and organized retail crime.
Impact of Theft and Employee Safety
Last month, Target made the decision to close stores in New York, Seattle, the San Francisco and Oakland area, and Portland, Oregon. The retail giant cited the impact of theft and the importance of employee and guest safety as the primary reasons behind the closures. The effective date for all store closures is set for October 21st.
Unveiling the Crime Data
While Target has not disclosed specific incidents at these locations, researchers have delved into publicly available crime data to shed light on the situation. Interestingly, Popular Information reports that stores in New York, San Francisco, and Seattle, which are being closed, actually have lower levels of theft compared to nearby stores that will remain open. This implies that factors other than crime are influencing Target’s decision. The website suggests that Target and other retailers may be overemphasizing crime as a means to divert attention from internal issues such as staffing levels.
Foot Traffic Trends Speak Volumes
To gain further insight into Target’s decision, we can examine foot traffic trends. According to Gravy Analytics, a location-intelligence company, foot traffic to most of the stores that are set for closure has been steadily declining. In the second quarter of 2023, San Francisco Target locations experienced a significant drop of 23% in foot traffic compared to the same quarter in the previous year. New York City locations saw a decline of 15%, while Seattle witnessed a decrease of 6%. Surprisingly, foot traffic to Target stores in Portland surged by an impressive 43% during the same period.
Target has yet to respond to requests for comment regarding these findings.
Despite the absence of detailed information about specific incidents, it is clear that Target’s decision to close these stores is multi-faceted, with considerations for theft, employee safety, foot traffic trends, and internal operational concerns. As the retail industry continues its battle against theft and organized retail crime, the impact on store closures cannot be overlooked.
Steady Theft Metrics in the Retail Industry
A recent report in the retail industry reveals that the metric for rising theft hasn’t seen a significant increase, contrary to what many retailers claim. In fact, this report challenges the perception that theft rates are soaring.
While Target’s decision to close stores in cities like San Francisco, New York City, and Seattle can be seen as a strategic move to minimize financial losses in areas with declining foot traffic and high theft rates, their decision to close stores in Portland seems perplexing at first glance. Jolene Wiggins, Gravy’s chief marketing officer, acknowledges the surge in customer visits in Portland but refers to the broader challenges that Target is currently facing. Even with increased foot traffic, if these stores struggle to generate sufficient profits due to the escalating theft and security costs accompanying it, the closure of stores in Portland becomes a sensible business move.
During a conference call discussing Target’s second-quarter results, CEO Brian Cornell expressed concern over the “unacceptable amount” of retail theft and organized retail crime faced by the company. Cornell also highlighted the safety threats Target employees encounter on a daily basis, revealing that theft involving violence or threats of violence has seen a staggering 120% increase during the first five months of 2023.
According to a recent report from the National Retail Federation, retail crime caused over $112 billion in industry losses in 2022, a significant rise from the $93.9 billion reported in 2021.
Despite facing backlash over anti-LGBTQ+ claims, Target seems to be thriving as foot traffic continues to grow. On Thursday, Target’s stock showed a 1.7% increase, outpacing the 0.2% gain of the S&P 500 index.
Conclusion
While retailers often discuss the rising rates of theft, this report shed light on a different perspective. The data suggests that the theft metric hasn’t experienced a substantial increase. Target’s strategic store closures in cities with declining foot traffic and high theft rates, as well as their challenges in generating sufficient profits due to theft and security costs, demonstrate a calculated approach to mitigating financial losses. It is crucial for retailers to address the growing threat of retail crime and prioritize the safety of their employees in order to sustain profitability in a challenging market.
