Best Buy reported good quarterly results on Tuesday, noting continued sales gains despite product shortages and consumers focused less on building out home offices than they were last year. But the electronics retailer noted one factor that slowed its growth: a jump in thefts they say is perpetrated by organized rings.
“Across retail, we are definitely seeing more and more particularly organized retail crime,” Best Buy CEO Corie Barry told Wall Street analysts on a conference call to discuss its earnings report. Barry also said the company was looking into how it could “lock up product that still make that a good customer experience” and has also hired security at some store locations. While locking more items up could reduce loss, it raises another risk for retailers by creating a new point of friction — customers might have to look for an employee to grab a set of headphones at Best Buy, or a pack of razor blades at CVS.
Barry’s comments come days after a dramatic attack on a Nordstrom store in which 80 people ransacked the luxury store in Walnut Creek, Calif., in the Bay Area on Saturday by driving up to the store in 25 cars and blocking access to it, before looting it and assaulting employees in a raid that only took about a minute.
Last month, Walgreens said it was closing five San Francisco stores due to shoplifting. (An analysis of local crime statistics by the San Francisco Chronicle questioned that premise for the store closings.) The Wall Street Journal recently reported that shoplifting at CVS stores has risen 30% since the start of the pandemic. Last week, in its otherwise strong earnings report, Target noted “increased inventory shrink,” an industry term for merchandise lost to shoplifting, theft by employees or simply lost during transit.
The Coalition of Law Enforcement and Retail estimates that organized retail crime is responsible for around $45 billion in annual losses now, 50% more than a decade, according to The Journal‘s report.
But Barry told reporters on a media call that while was the theft problem was more acute in San Francisco specifically and California generally, Best Buy is seeing “pockets of it all over the country.” That has included some people entering the stores armed with crowbars, guns, or simply groups running into the store and grabbing what they can. And that has been in addition to unruly customers during the pandemic. “This is a real issue that hurts and scares real people,” Barry said.
That in turn could aggravate a big challenge for all retailers that has already seen them fall over each other to offer higher pay and new perks: attracting and retaining talent at a time retailers are struggling to have enough staff amid fatigue from months of dealing with often abusive shoppers.
“When we talk about why there are so many people looking for other jobs or switching careers, this of course would be something that would play into my concerns for our people,” Barry told reporters. But the challenge for Best Buy and other major retailers is how to combat the problem.
“It’s a difficult crime to stop,” Barry said.
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