Target’s decision to close one store in New York City‘s Harlem neighborhood, two in Seattle, three in the San Francisco-Oakland area, and three more in Portland, Oregon, underscores the severity of the situation. The company made it clear that the ongoing theft and organized retail crime wave have taken a toll on their business, leading to unsustainable performance levels.
“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” Target stated in a news release. “We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all.”
This decision by Target to close stores highlights the company’s ongoing battle with organized retail crime. Theft has been a significant factor in higher levels of shrink, which describes the losses incurred from damaged, misplaced, or stolen goods.
Target’s CEO, Brian Cornell, previously acknowledged the impact of organised retail crime during the fiscal second-quarter earnings report in May. He stated that the overall shrink is expected to reduce Target’s full-year profitability by over $500 million compared to the previous year.
While addressing the issue, Cornell emphasised the company’s reluctance to close stores, highlighting their importance in local communities. Target has been actively advocating for legislative reform to combat organized retail crime, supporting bills like the Combating Organized Retail Crime Act.The Combating Organized Retail Crime Act proposes stricter penalties for theft offenses and aims to facilitate information exchange among retailers and law enforcement through the proposed Organized Retail Crime Coordination Center.Several states have already passed similar laws to impose harsher penalties for organized retail crime offenses, driven by the influence of retailers and trade associations. Store closures, or the threat of them, have played a significant role in convincing lawmakers to support these measures.
Target has not only relied on legislative support but has also taken various measures to address retail crime, including locking cases for merchandise, hiring third-party security services, providing training on de-escalation techniques, and investing in cybersecurity. However, these efforts were not sufficient to ensure the safety and success of the affected stores.
The company has committed to working with employees at the closed stores, offering them opportunities to transfer to other Target locations.
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