Target CEO Says Company is Losing Hundreds of Millions of Dollars Due to Theft
Target Chairman and CEO Brian Cornell stated in a call to reports this week that the store chain is facing significant profit loss due to theft and “violent incidents” occurring at their locations.
“The unfortunate fact is violent incidents are increasing at our stores and across the entire retail industry. And when products are stolen, simply put they are no longer available for guests who depend on them.”
Target CEO Brian Cornell
Last Wednesday, Target released its first quarter earning and estimated that the company will lose $500 million in profits just this year alone.
The company announced in its earnings statement that theft in its stores will reduce an estimated $500 million in profits just this year alone. The company specifically cites theft and inventory shrinkage as the biggest factors in its estimated profit loss.
“Left unchecked, organized retail crime degrades the communities we call home. As we work to address this problem, the safety of our guests and our team members will always be our primary concern. Beyond safety concerns, worsening shrink rates are putting significant pressure on our financial results.” – Target CEO Brian Cornell
The news of Target’s struggles with theft and violence comes as no surprise. Over the last few years, there has been a noticeable increase in blatant theft and crime in department stores across the country.
Target CFO Michael Fiddelke stated in a Yahoo Finance interview that rising theft rates are not a problem unique to Target. “We know we’re not alone in seeing elevated levels of shrink and organized retail crime driving some of that theft,” Fiddelke said.
Earlier this year, Walmart was forced to make the decision to close half of its locations in Chicago due to profit loss. The company explained their remaining stores were still losing money, but they wanted to keep some locations in Chicago open in order to help the community. Walmart also announced earlier this year that they will be closing all remaining stores in Portland, Oregon.
Viral footage on social media of individuals openly stealing products at stores continues to be a weekly occurrence. As liberally-ran urban cities continue to be hesitant to enforce the law and arrest criminals stealing from stores, this trend is likely to continue.
