Current:Home > FinanceLobbying group overstated how much "organized" shoplifting hurt retailers-DB Wealth Institute B2 Expert Reviews
Lobbying group overstated how much "organized" shoplifting hurt retailers
View Date:2024-12-23 18:57:01
A national trade group representing retailers incorrectly attributed half of all industry losses two years ago to organized shoplifting, raising questions about how much merchandise thefts are weighing on retail chains' financial results.
In a report on what it calls "organized retail crime," the National Retail Federation (NRF) initially said theft results in $45 billion in annual losses for retailers, roughly half of the industry's total of $94.5 billion in missing merchandise in 2021. But the lobbying group has since retracted the figure, saying the report from the group relied on an inaccurate figure from Ben Dugan, president of the National Coalition of Law Enforcement and Retail.
The statement that half of all missing merchandise, known in the retail industry as "shrink," was attributable to crime was "a mistaken inference," the NRF said in a statement to CBS MoneyWatch. It was based on a statement Dugan made in 2021 Senate testimony, the group added. It has since amended the report to make clear that Dugan was citing 2016 statistics representing total retail shrink — not the share attributable to organized theft.
Shrink also encompasses losses related to merchandise that isn't scanned properly, vendor fraud and fraudulent product returns. Organized retail crime refers to rings of criminals acting together to steal a range of goods from stores that can be sold.
Although the financial losses blamed on retail crime in 2021 were overstated, the NRF said retail crime poses a significant threat to stores.
"We stand behind the widely understood fact that organized retail crime is a serious problem impacting retailers of all sizes and communities across our nation," the NRF said in a statement. "At the same time, we recognize the challenges the retail industry and law enforcement have with gathering and analyzing an accurate and agreed-upon set of data to measure the number of incidents in communities across the country. The reality is retailers and law enforcement agencies continue to experience daily incidents of theft, partner in large-scale investigations and report recoveries of stolen retail goods into the millions of dollars."
Retailers including Target have blamed recent store closures on surging retail crime.
In an October note to investors, analysts with investment bank William Blair suggested that some retailers are exaggerating the impact of theft to disguise their poor business performance.
"While theft is likely elevated, companies are also likely using the opportunity to draw attention away from margin headwinds in the form of higher promotions and weaker inventory management in recent quarters," they wrote. "We also believe some more recent permanent store closures enacted under the cover of shrink relate to underperformance of these locations."
Retail analyst Neil Saunders said the problem is hard to quantify, particularly when retailers are cagey with numbers.
"Crime is an issue — I don't think that should be denied," he told CBS MoneyWatch. "The problem is there's a lot of talk about it as an issue, but very little quantification of how much an issue it is."
A recent analysis from the nonpartisan Council on Criminal Justice found that reports of shoplifting in two dozen cities rose 16% between 2019 and the first half of 2023. When theft data from New York City was excluded, however, the number of incidents across the other cities fell 7% over that period.
- In:
- Shoplifting
Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News streaming to discuss her reporting.
veryGood! (96)
Related
- 'Serial swatter': 18-year-old pleads guilty to making nearly 400 bomb threats, mass shooting calls
- Woman sues Jermaine Jackson over alleged sexual assault in 1988
- US says Russia has used North Korean ballistic missiles in Ukraine and is seeking Iranian missiles
- 2 Mass. Lottery players cash $1 million tickets on the same day
- Halle Berry surprises crowd in iconic 2002 Elie Saab gown from her historic Oscar win
- Vatican says no heresy in allowing blessings for same-sex couples after pushback by some bishops
- Sandra Bullock Spreads Late Partner Bryan Randall's Ashes in Wyoming
- Live updates | Hamas loses a leader in Lebanon but holds on in Gaza
- Caitlin Clark has one goal for her LPGA pro-am debut: Don't hit anyone with a golf ball
- St. Petersburg seeks profile boost as new Tampa Bay Rays ballpark negotiations continue
Ranking
- Celtics' Jaylen Brown calls Bucks' Giannis Antetokounmpo a 'child' over fake handshake
- Kentucky governor backs longer list of conditions eligible for treatment under medical marijuana law
- Glynis Johns, who played Mrs. Banks in 'Mary Poppins,' dead at 100: 'The last of old Hollywood'
- T-Mobile offers free Hulu to some customers: Find out if you qualify
- How Ben Affleck Really Feels About His and Jennifer Lopez’s Movie Gigli Today
- Bangladesh opposition calls for strike on election weekend as premier Hasina seeks forgiveness
- With 2024 being a UK election year, the opposition wants an early vote. PM Rishi Sunak is in no rush
- Wisconsin redistricting consultants to be paid up to $100,000 each
Recommendation
-
Why Outer Banks Fans Think Costars Rudy Pankow and Madison Bailey Used Stunt Doubles Amid Rumored Rift
-
Natalia Grace Case: DNA Test Reveals Ukrainian Orphan's Real Age
-
New York City subway train derails in collision with another train, injuring more than 20 people
-
Keke Palmer Says She’s “Never Been So Happy” in Her Life Despite Darius Jackson Drama
-
Why was Jalen Ramsey traded? Dolphins CB facing former team on 'Monday Night Football'
-
Over a week after pregnant Texas teen Savanah Soto and boyfriend Matthew Guerra killed, a father and son have been arrested
-
Brazilian politician’s move to investigate a priest sparks outpouring of support for the clergyman
-
Make these 5 New Year's resolutions to avoid scams this year