Target anticipates $500 million more in stolen and lost merchandise this year due to organized retail crime.
Calculations based on the company’s financial reports indicate that Target lost $763 million in inventory over the previous fiscal year, an occurrence known as shrink. This year’s shrink is expected to reach more than $1 billion.
On the company’s fiscal first-quarter results call, CEO Brian Cornell raised the issue, noting that the retailers are also dealing with growing theft in addition to slowing sales and more price-conscious customers.
In addition to retail theft, he said violent incidents have increased at Target’s stores over the past year.
“The problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm’s way,” he said on the call.
According to the National Retail Federation, shrink cost retailers $94.5 billion in 2021, up from $90.8 billion in 2020. The data further shows that external retail crime accounts for only 37% of those losses, or about $35 billion.
Cornell said the company is trying to reduce theft in some Target stores by adding security fixtures and changing the inventory in some stores.
Cornell said the company is “focused on keeping our stores open in the markets where problems are occurring.”