Retailers face a ‘perfect storm’ as thefts escalate and public safety is disrupted – News Couple
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Retailers face a ‘perfect storm’ as thefts escalate and public safety is disrupted


Retail theft is on the rise across the United States, with large chains such as Best Buy (BBY) and Walgreens (WBA) suffering from widespread and scandalous store thefts that hurt bottom lines.

In recent weeks, social media has been flooded with reports of “smashing and kidnapping” burglaries in major cities – featuring throngs of thieves dragging electronics, clothes and shoes.

Security experts cite a range of reasons including the fallout from the COVID-19 pandemic, the overwhelm of law enforcement, and the deterioration of public safety. In San Francisco in particular, some types of theft have been nearly decriminalized, with officials facing accusations of severe leniency in crimes.

The Law Enforcement and Retail Alliance, a trade association, estimates that organized retail crime results in approximately $45 billion in losses to retailers each year. More than $500 billion in stolen and counterfeit goods are sold illegally on third-party platforms such as Amazon (AMZN).

“What we’re seeing is kind of a perfect storm,” Ben Duggan, president of the alliance, told Yahoo Finance Live this week. Duggan said the coalition is pushing for federal legislation to regulate online marketplaces, “so that people don’t hide in the shadows of the internet and operate anonymously.”

He also noted the influence of organized crime networks that use petty thieves to further their activities.

“They are already being recruited by criminal organizations that engage in so-called ‘organised retail crime’, [which] Since 2017, with most of the online market expanding.”

“Unfortunately, I don’t think some of these young people really understand the amount of problems they’re in, they really get involved with the criminal organizations that recruit them and convince them there won’t be any consequences,” Duggan said.

Los Angeles, San Francisco in the spotlight

SAN FRANCISCO, CA – OCTOBER 13: Products are displayed in locked security lockers at a Walgreens store that is scheduled to close in the coming weeks on October 13, 2021 in San Francisco, California. Walgreens has announced plans to close five of its San Francisco stores due to the organized retail theft that has plagued its stores in the city. The retail pharmacy chain has already closed 10 stores in the city since 2019 (Photo by Justin Sullivan/Getty Images)

California has been swept by a wave of burglaries and thefts in recent weeks, with most incidents occurring in stores near San Francisco and Los Angeles. In Lakewood, a group of eight to nine youths stole an estimated $400 in tools, including heavy hammers and crowbars that could be used in future crimes, according to the Los Angeles County Sheriff’s Department.

In October, Walgreens ignited a firestorm by announcing that it was closing several San Francisco locations due to an escalation of what it called “organized retail theft.” Shares of Best Buy came under pressure after the company reported tepid sales forecasts this holiday season.

On a conference call last week, the company stunned investors by pointing to organized thefts as being partially responsible for the company’s lower gross margin in the third quarter.

“We’re seeing more and more organized retail crime,” CEO Cory Barry said on a call with analysts. “You can see this pressure in our financial statements, and more importantly, frankly, you can see this pressure with our partners. It hurts.”

Tragically, the wave of violence killed at least one person. Over the weekend, Kevin Nishita, a retired police officer, was shot dead while protecting a San Francisco Bay Area news crew covering the area’s organized retail crime chain.

In most cases, Dogan explained, criminal organizations provide their recruits with rental cars, escape routes and burglary tools, or allow them to use their own weapons.

“They are planning these events with these young people, on the grounds that there is a high propensity for violence and they have no regard for human life or the consequences,” Duggan said.

Police in Los Angeles have arrested four people in connection with a burglary at Home Depot (HD) in Lakewood. However, thieves often face few consequences.

Fee rates for theft and petty theft are down in the Bay Area, according to an analysis of data found by the San Francisco Chronicle. The crime wave has placed intense political pressure on District Attorney Chesa Bowden, a progressive former attorney general who is now facing an impeachment bid.

Bowden noted that the drop in fee rates is due to the reduced operation of the city’s court system due to pandemic restrictions. However, theft charges increased between 2020 and 2021 as the city reopened.

It also announced that nine people had been charged with felonies in a series of recent robberies that included mass wrecks at luxury Union Square stores. A group of at least 40 people were allegedly involved in these incidents.

There are many different victims of this crime, and it’s not just the stores. People are subjected to physical abuse. It is a huge burden for the employees who are shocked by this event.Ben Duggan, Coalition for Law Enforcement and Retail

Meanwhile, more than two-thirds of retailers said the pandemic has increased their organizations’ overall risk, according to data from the 2021 Security Survey from the National Retail Federation, with 57% reporting a rise in organized retail crime.

The issue presents a dilemma for store employees, who may face the option of trying to deter thieves at risk to their personal safety. But experts warn that employees should “not deal” with shoplifters.

“There’s nothing in the store that’s worth anyone getting hurt for,” Duggan told Yahoo Finance.

“There are a lot of different victims in this crime, it’s not just the stores. People are being physically assaulted. It is a huge burden for the employees who are traumatized by this event.”

This week, California Governor Gavin Newsom directed the California Highway Patrol to increase its presence near highways adjacent to crowded California malls and to stop at malls.

The CHP’s Organized Retail Crime Task Force plans to help local law enforcement investigate retail crime and recover stolen merchandise. Since 2019, the task force has made 240 arrests and recovered $18.9 million in stolen goods.

Some retailers have stepped up their security measures in response to the spree of burglaries and burglaries. Along Rodeo Drive in Beverly Hills, California, a pair of private security firms patrolled a tidy shopping district in response to an attempted smash and robbery at Louis Vuitton and Saks Fifth Avenue stores last weekend.

“Retailers are investing millions of dollars this holiday season in response to a lot of these recent thefts and upgrading their security, adding a lot of physical security technology, resources, manpower and off-duty policing,” Duggan said.

Danny Romero, Yahoo Finance reporter. Follow her on Twitter: daniromerotv

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