Target Closing Nine Stores Due To Theft And Violence

In a significant and troubling business move, Target has decided to permanently close nine stores across four U.S. states in the San Francisco-Oakland area, Portland, Seattle and the Harlem neighborhood of New York City, citing a surge in theft, violence, and organized retail crime, which have collectively jeopardized the safety of both customers and employees. The closures will take effect on October 21, reflecting the broader national issue of rising organized retail crime threatening the retail industry.

Target’s CEO, Brian Cornell, detailed that the company has grappled with an “unacceptable amount” of retail theft, which has become progressively violent and hazardous for workers. “We do not want to close stores,” he stated, emphasizing the importance of Target stores in creating local jobs, generating taxes, and playing a critical role in communities across the country.

The decision to close these stores was preceded by extensive measures undertaken by Target to counteract theft and retail crime. The company invested substantially in enhancing internal security and incorporating third-party guard services, among other strategies. Yet, the efforts failed to mitigate the crime rate effectively. Even the adoption of theft-deterrent tools and additional security members proved insufficient in combating the growing challenge.

The rise in such crimes is not unique to Target, but it reflects a national trend, as retail crime, often involving large groups and orchestrated efforts, continues to plague cities around the country. Notably, critics attribute this increase to lenient legal consequences, enabling criminals to evade severe repercussions for their actions. Senators have even introduced legislation to curb such crime, advocating for multi-agency federal task forces and stricter state laws to impose harsher penalties on those involved in organized retail crime.

The implications of these crimes are far-reaching, affecting not only the retail sector but also consumers. Retail shrink, which includes losses due to theft, damage, and other factors, was a $112 billion problem in 2022, up nearly 20% from the previous year. Target’s decisions to lock cases for merchandise prone to theft and to increase investment in cyber defense technology are necessary adaptations to protect consumer interests and the availability of products.

While Target’s effort to train its employees and security teams on protection and de-escalation is commendable, the company’s partnerships with agencies like the U.S. Department of Homeland Security to develop tools to prevent criminal activity, demonstrate the severity of the organized crime problem, revealing the extensive, coordinated reach of these criminal groups. These crimes’ alarming scale and organization necessitate a unified, robust response from retailers, lawmakers, and law enforcement agencies to safeguard communities and maintain business sustainability.

Furthermore, the closures occur against a backdrop of dwindling sales for Target, marking a 5.4% decrease for the first time in six years. This fiscal struggle is compounded by a substantial cut in profits by $500 million this year due to inventory shrinkage, underscoring the economic repercussions of organized retail crime on the retail industry.

The price of Target’s stock (TGT) has fallen more than 31% in the last six months.
Target’s decision to close its stores clearly reflects the challenging environment created by organized retail crime. It’s a wake-up call for lawmakers and communities to address the root causes of this surge in crime, ensuring that the implications do not extend further into the fabric of our society.