A Walgreens executive said Thursday that the drugstore chain may have overplayed concerns about shoplifting at its stores in 2022.
“Maybe we cried too much last year,”
Walgreens’ global Chief Financial Officer James Kehoe told investors on an earnings call. Walgreens and other retailers have sounded the alarm in recent years about the threat of organized shoplifting to their bottom lines as viral videos of brazen shoplifting raids have swept the internet.
Walgreens in 2021 said it shuttered five San Francisco stores, citing
disputed claims about an uptick in theft.
A year ago,
Kehoe told investors the company in 2020 and 2021 experienced a 52% increase in shrink – an industry term that refers to lost inventory, either by mismanagement or theft – compared to pre-2020 levels, attributing it to “organized crime.”
“It’s not somebody who can’t afford to eat tomorrow,” Kehoe said in a Jan. 2022 conference call. “These are gangs that actually go in and empty our stores of beauty products,” adding that the issue was felt across the retail industry.
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But shrink at Walgreens recently has come down to 2.5-2.6% of sales from 3.5% in 2022, according to Kehoe, who said Thursday he was “quite happy” with current shrink levels.
Kehoe said Walgreens would consider rolling back investments it made to beef up its stores’ private security, which he called “largely ineffective.” It would instead look to further partner with law enforcement, he said.
Even as retailers tout a shoplifting crisis that threatens business, shrink has remained largely unchanged industry-wide in the last five years, according to the National Retail Federation.
The median retail shrink percentage was 1.2% in 2021, the same as in 2016, according to the
NRF’s 2022 retail security survey.