Shoplifting has apparently gotten so bad at Target – and we say apparently because this is the excuse that Target's top dogs are using – that the company expects to lose a total of $600 million in profits this year.
Target's gross margin rate dropped from 28 percent in last year's third quarter to 24.7 percent this year. Higher markdown rates and inflating freight costs are also shouldering some of the blame.
"At Target, year-to-date, incremental shortage has already reduced our gross margin by more than $400 million vs. last year and we expect it will reduce our gross margin by more than $600 million for the full year," said company chief financial officer (CFO) Michael Fiddelke during Target's recent earnings calls.
"This is an industry-wide problem that is often driven by criminal networks."
John Mulligan, Target's chief operating officer (COO), added that – presumably referring to the George Floyd incident and subsequent Black Lives Matter (BLM) riots – "it started probably in some localized geographies originally, but we see those circles expanding and the impact continuing to grow."
Mulligan went on to use the same verbiage as Fiddelke, referring to this growing phenomenon as being "primarily driven by organized crime." (Related: Remember when Yelp was encouraging Antifa terrorists to target and loot all businesses accused of "racism?")
Rite Aid lost $5 million in just the past three months due to rampant product theft
Drug store chain Rite Aid is in a similar predicament, especially in larger cities like New York where crime is off the charts. Just in the past three months, Rite Aid has lost $5 million in profits.
Chief executive officer (CEO) Heyward Donigan says Rite Aid's New York City stores are the main source of the problem, and that there is no insurance on shrink, which means the company's gross margin is suffering.
"The environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city," said chief retail officer Andre Persaud.
"We're looking at literally putting everything behind showcases to ensure the product is there for customers who want to buy it."
Target is doing much the same, though not every item is going behind glass – just essentials like toothpaste and shaving cream, which are common items that thieves pocket before walking out of the store without paying for them.
The situation at Target is so bad that the retail giant now has its own forensic science team based in Minneapolis and Las Vegas that uses video and image analysis, latent fingerprint collection, and computer forensics to try to track down thieves for prosecution.
For all intents and purposes, both Target and Rite Aid stores have become crime scenes in some of the worst cities. These two companies are having to turn their stories into corporate prisons where only the warden is allowed to unlock the doors to allow product access.
"The biggest focus for us is keeping our team and our guests safe," said Mulligan about Target's ongoing efforts to fight crime in its stores.
In 2020 in New York City, the total reported number of retail thefts was 32,358. In 2021, that number grew to 43,864. For 2022, the city is well on track to break a new record.
The latest news about the fall of the United States under crony capitalism – the biggest organized crime racket of all – and the widespread poverty it has created can be found at Collapse.news.
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