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Tuesday, January 31, 2023
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Walmart May Hike Prices, Close Stores Due to Wave of Shoplifting

'This is an industry-wide problem that is often driven by criminal networks... '

(Headline USAWalmart’s CEO warned this week that the company may have to raise prices or even shutter certain locations because of rampant shoplifting and soaring crime rates.

“Theft is an issue. It is higher than what it has historically been,” Doug McMillon told CNBC on Tuesday. “If that’s not corrected over time, prices will be higher, and/or stores will close.” 

McMillon said his stores have “safety measures, security measures that we’ve put in place by store location,” and added that “local law enforcement … being a good partner is part of that equation.”

But there has been “a lax approach from prosecutors” that could “impact prices and lead to store closures down the line,” he said.

“It’s really city by city, location by location,” he explained. “It’s store managers working with local law enforcement and we’ve got great relationships there for the most part.”

Walmart is just one of many retailers that have seen a surge in organized theft cases over the past year. Target recently said shoplifting has jumped 50%, resulting in more than $400 million in losses this fiscal year.

“This is an industry-wide problem that is often driven by criminal networks,” Target CFO Michael Fiddelke told investors in a recent earnings call. “We know we’re not alone across retail in seeing a trend that I think has gotten increasingly worse over the last 12 to 18 months.”

RiteAid also warned customers that their stores would be going to extraordinary lengths to prevent theft.

“We’re looking at literally putting everything behind showcases to ensure the products are there for customers who want to buy it,” Rite Aid’s Chief Revenue Officer Arnaud Persaud said during an October earnings call. “We’ve even had to go to the extent of using off-duty police officers in some of our stores.”

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