Retail shrinkage often gets attributed to relatively mild or nonviolent issues: poor inventory practices, mistaken discounts, and so forth. But as a spate of recent criminal incidents show, the threats of outright theft and organized robbery operations have moved front and center for many retailers, highlighting the need to remain vigilant and careful.

According to a recent National Retail Federation survey, 69 percent of retailers indicate that they have been victimized by purposeful robbery attempts, often by organized groups determined to commit the crime. A remarkable security video, taken in November 2021 outside a California Nordstrom store, shows scores of thieves swarming the entry simultaneously. Once inside, they assaulted and pepper sprayed the retail employees on duty, grabbed up as much merchandise as they could carry, and fled before law enforcement officials could arrive. Although three members of the organized crew were apprehended, an estimated 80 criminals succeeded in their efforts.

For Best Buy, criminal theft represents a key factor that the retailer blames for declining and lower-than-expected profits. In addition to hiring more security personnel, it has begun experimenting with placing QR codes on the cases in which it locks up expensive merchandise as a potential solution. Honest consumers can scan the codes and take their electronic orders to the checkout line to retrieve their purchases. Thus, store employees do not need to risk unlocking cases and potentially leaving the valuable products unguarded as they do so—a key vulnerability if thieves are organized and determined to snatch and grab such items.

Beyond these examples, many retailers note not just the increasing number but also the greater violence displayed by thieves, putting retail employees at great risk. In the San Francisco Bay area, reports of large-scale robberies have involved attacks on pharmacies, cannabis dispensaries, and jewelry stores, reflecting the wide range of retail sectors that are confronting this grave risk.

The causes of this intensification continue to be debated—the struggling economy, social exclusion, growing disrespect for authority—but for the retailers, determining the causes is less immediately pressing than finding solutions to protect not just their inventory and profit margins but also, and most importantly, their employees.

Discussion Question:

1. What other solutions might retailers adopt to deal with the increasing threat of robberies?
2. How should retailers adjust their pricing to account for the greater losses resulting from criminal robberies?

Source: Sapna Maheshwari, “Robberies Are Becoming an Increasing Concern for Retailers,” The New York Times, November 26, 2021; Joe Hernandez, “80 People Stormed a California Nordstrom Store and Stole Merchandise,” NPR, November 22, 2021