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Crime in the retail world makes for not so happy holiday shopping season
Organized retail theft costing retailers ahead of holiday shopping season
FOX Business’ Jeff Flock reports from Jackson, New Jersey, where an organized retail crime ring was recently busted.
The holiday shopping season is arriving amid a wave of organized retail crime, with some executives having recently raised the alarm about the issue.
The National Retail Federation found in its 2022 National Retail Security Survey that total losses from shrink – the term retailers often use for theft and other types of inventory losses – increased roughly 4%, coming in at $94.5 billion in 2021. Shrink losses were "primarily driven by external theft, including theft attributed to ORC [organized retail crime]," the report released in mid-September said.
RETAIL CRIME RING BUSTED AS MAJOR STORES ‘FEAR’ RISING THEFTS HEADING INTO HOLIDAY SHOPPING SEASON
ORC incidents soared 26.5% on average in 2021, with 81.2% of retailers surveyed reporting "somewhat more" or "much more" ORC-associated aggression and violence year-over-year, according to the survey.
During Target’s third-quarter earnings call in mid-November, CFO Michael Fiddelke said a factor affecting Target’s gross margin is "inventory shortage, or shrink, which is a growing problem facing all retailers."
"At Target, year to date, incremental shortage has already reduced our gross margin by more than $400 million versus last year, and we expect to reduce our gross margin by more than $600 for the full year," he said. "This is an industry-wide problem that is often driven by criminal networks, and we are collaborating with multiple stakeholders to find industry-wide solutions."