By Siddharth Cavale and Arriana McLymore
NEW YORK (Reuters) – Retailers from Walmart to Barnes & Noble are installing cameras or locking items away to deter shoplifters and thieves as they prepare for a post-pandemic rush of holiday shoppers this year.
Some, including Walmart, JC Penney, and Walgreens, have installed new surveillance systems or increased security personnel. Others, like Target and Barnes & Noble, sealed merchandise behind plexiglass or attached it with steel cables to support shelving.
The retail industry has denounced theft this holiday season as it struggles with excess inventory and a slump in consumer spending at a time of high inflation.
“Sales are suppressed. Profits are being penalized at the time of the highest inflation in 42 years. And now that the cost of crime prevention is rising, that’s being passed on in higher prices,” said Burt Flickinger, managing director of retail consulting firm Strategic Resource Group.
The impact on holiday sales and profits “will be appalling,” he added. “Today you can see that shampoos are locked up, along with acetaminophen and tylenol, and multipacks of toothpaste that are locked up…People planning to shop in stores will not want to enter those locked and over-secured stores. So overall, retailers are losing both planned buying and impulse buying.”
Crime has been in the spotlight since a series of brazen, violent shoplifting incidents – including a “smash and grab” incident during the holiday season last year in which 80 people burst into a Nordstrom near San Francisco and ran off with a pile of goods and five injured employees. A National Retail Federation (NRF) survey reported a 26.5% increase in “organized retail crime” committed by groups of people last year.
However, it is unclear whether retail crime is increasing in the US overall, as little data is available on the issue. Total losses from shoplifting, theft, fraud and error for US retailers in 2021 remained stable at an average rate of 1.4% of total sales, as in the previous five years.
Still, retailers are reallocating more resources to safety this quarter, which could add pressure on margins already squeezed by higher gas, transportation, labor and raw material costs.
Part of the problem is that petty crime is cumbersome to prosecute, and some states have raised their thresholds on the value of stolen goods to around $1,000 to trigger a felony charge.
That puts the primary responsibility on preventing crime, especially during Thanksgiving weekend when record turnout of shoppers is expected. The busy holiday season accounts for almost 20% of total US retail sales for the year.
SURVEILLANCE AND FLASHING LIGHTS
The signs of the times can be seen in the small communities of Paducah, Kentucky, and Opelika, Alabama, where Walmart, JC Penney, Walgreens and other major retailers have installed large, mobile surveillance units that record all activity in their parking lots.
Walmart, for example, said it has nine surveillance units in front of three giant Supercenter stores in both cities.
The units, which are being provided by LiveView Technologies as part of a pilot, will provide retailers with 24-hour live video footage so they can alert authorities to suspicious activity, Paducah Police Chief Brian Laird said. They also have flashing strobe lights and speakers to warn would-be thieves that their actions are being watched.
Other retailers have focused their anti-theft efforts on their stores. For example, a target in White Plains, New York placed all Ulta Beauty cosmetics behind sealed Plexiglas.
At Barnes & Noble in the Galleria Mall in White Plains, American Girl “Wellie Wisher” dolls are tied to the shelves with electronic ties. At another Barnes & Noble store in Manhattan, customers are required to carry empty Lego set boxes to checkout and receive the pieces after purchase.
Big consumer goods companies like Procter & Gamble are upset — and so are buyers.
P&G said last week it’s investing in in-store displays to avoid getting its razor blades stuck in glass cases, while shoppers complain the sealed displays and cables are slowing them down and forcing them to find staff who can Goods can release.
“Aim has a new function!” TikTok user @manifest_makeup wrote in the caption of a video shared with her 20,000 followers in September. “Now everything is behind glass like at Walmart!”
Rex Freiberger, a 40-year-old Los Angeles resident, says he’s noticed “an increasing number of items” placed behind Plexiglas at the Walmart where he buys Christmas gifts.
“My biggest frustration with having so many items behind closed doors is when stores don’t have enough workers on the floor to unlock those doors,” he said.
Retailers rarely openly admit to the threat of theft or crime because they generally don’t want to scare shoppers.
But Target said last week it had seen a “precipitous decline” in discretionary spending and announced theft could wipe out more than $600 million in gross profits this year. That’s nearly 2% of the $31 billion in gross profits the company generated last year.
“Together with other retailers, we have seen a significant increase in theft and organized retail crime across our business,” Target CEO Brian Cornell told investors on a Nov. 16 conference call.
“As a result, we are making significant investments in training and technology that can prevent theft and keep our guests and team members safe.”
(Additional reporting by Doyinsola Oladipo, editing by Deepa Babington)