Crime-battered retail giant Target blamed “theft and organized crime” for an expected $500 million hit to its bottom line this year, according to the company’s first-quarter earnings report released Wednesday.
The Minneapolis-based chain store last year suffered a $400 million loss in profits from “inventory shrink” — a term that refers to fewer products being on its shelves than what’s reported in its inventory catalogue.
“While there are many potential sources of inventory shrink, theft and organized retail crime are increasingly important drivers of the issue,” the company said. “We are making significant investments in strategies to prevent this from happening in our stores.”
The report didn’t reveal Target’s strategy for offsetting profit losses and preventing shoplifting
Despite the expected losses, Target recorded a 0.5% growth in sales — which it attributed to “new locations” — and a nearly 1% growth in traffic, the earnings report said.
Target shares were up more than 2%, to roughly $160, in morning trading.
The significant profit hit could put some of Target’s nearly 2,000 stores at risk for closure, according to the earnings report.
“We’re also focused on managing the financial impact on our business so we can continue to keep our stores open, knowing they create local jobs and offer convenient access to essentials,” the company reported.
Target CEO Brian Cornell didn’t respond to The Post’s request for comment.
In 2022, the retailer opened 23 new locations across the US, with plans to open 40-plus stores across California, New York, Florida and Texas, according to its website.
But brazen shoplifting has been a growing problem for Target stores around the country as roving packs of bandits systematically steal merchandise.
Most recently, workers at a Target in downtown San Francisco told a local paper that thefts happen every 10 minutes.
One store employee who asked to remain anonymous told The San Francisco Standard: “Look in some corner of the store, and you’ll see people shoveling stuff into a bag — food, cosmetics.”
As a result, everyday items like shampoo, deodorant, toothbrushes, makeup and snacks are locked up behind plastic cases.
At that particular Target store — located in Metreon, a mall near Union Square — lipstick and nail polish were not barricaded, making them easy pickings for thieves.
“They were stocked this morning, now they’re empty,” another anonymous worker told The Standard.
The president of the California Retailers’ Association (CRA), Rachel Michelin, has slammed California’s lax response to shoplifting.
“The problem now… is that, people who are drug addicted, who have mental health issues, they candidly will go into stores and they will steal,” Michelin told The Post.
“They will sell those items out on the street, they then make money, they then continue their habit or continue a destructive lifestyle.”
Michelin blamed a contentious state law, known as Prop 47, as the root of the problem.
Officially called the Safe Neighborhoods and Schools Act, Prop 47 downgraded crimes like theft of goods under $950 from felonies to misdemeanors when it was passed in 2014.
Many have criticized the policy as a free pass for shoplifters to keep stealing while barely getting a slap on the wrist as punishment.
This story originally appeared on NYPost
