As part of its lackluster third-quarter earnings,Targethas reported a profit loss of $400 million which it blames on increasing “organized retail crime” year-over-year. Given how manyTargetretail locations there are around the world, the retail crime going up in multiple areas has caused massive shrinkage to their inventory which it has reported to investors in the latest earnings report.
According to Target, the disappearing inventory has decreased its gross profit margin by $400 million in 2022 compared to 2021 at the same point, reflecting a loss in what the company would’ve made if it sold the products that have been stolen. As theft has spiked in many places, Target isn’t the only retail chain to experience losses in the millions, and even McDonald’s has seen an influx of stealing during thelimited-timePokemon TCGHappy Meals. Because of the significance of the profit loss, Target has confirmed that it will be working to decrease the losses so that future years may not be so dismal for investors.
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Target CFO Michael Fiddelke stated that even further than the $400 million profit loss the company has already seen, the executive expects the figure will surpass “$600 million for the full year.” Pointing to a number of things that can cause the missing inventory that Target is expecting, Fiddelke stated that “theft is certainly a key driver,” and he emphasized it as a retail trend that’s gotten worse “over the last 12 to 18 months.” In an effort to stop the continued shrink like theirreaction toPokemon TCGscalping, Fiddelke suggested that Target is “taking the right actions” to rectify things, but he didn’t elaborate on what changes are being made to prevent the figure from exceeding $600 million for the year.
Although Target executives believe the significant losses are linked to organized retail crime, it’s currently unclear precisely how organized it is, with some viral clips hinting that there may be some randomness behind retail theft as well. Because of how many Target retail locations there are across the US, it’s unsure which stores are seeing the most theft, but Louisiana, Colorado, and Tennessee are among the states with the highest crime rate in 2022. Target isn’t alone in seeing such a drastic increase in theft asretailers like Best Buy, Rite-Aid, and more have reported similar issues to their investors and have noted a societal aspect behind the potential organized crime influx.
While many Target shoppers have lamented that they can’t find products that may have been stolen, others have suggested that they don’t feel bad for the reported losses. One customer pointed out that there aren’t enough employees at a local retail store as it needs despite the fact that Target isgearing up for Black Friday, which Amazon has already kicked off.
