A group of young people stormed businesses in downtown Philadelphia last Wednesday. Dozens of stores, including Apple, Foot Locker and Lululemon, were ransacked. The police took action and made dozens of arrests, but in recent months, similar incidents have been happening again and again in large cities across the United States.
The phenomenon has even been given a name: “smash-and-grab robberies.” On many occasions, the attacks are carried out with total impunity. The robbers enter in broad daylight, when the stores are still open, rush past the helpless employees and escape before the police arrive.
The same day of the smash-and-grab robberies in Philadelphia, the U.S. retail giant Target announced the definitive closure of nine establishments due to the rise in violence and robberies. The day before, on Tuesday, the U.S. National Retail Federation (NRF) warned of the rise of organized crime against stores. It reported that financial losses associated with theft reached $112 billion in 2022, a record high.
Social media is full of videos of retail robberies, especially on the West Coast, with the metropolitan areas of Los Angeles and San Francisco/Oakland the hardest hit by the wave of robberies. On August 1, a group of between 30 and 50 hooded people broke into the Nordstrom store in Topanga, northeast of Los Angeles, and took luxury products such as designer handbags worth between $60,000 and $100,000, according to police. The thieves used bear repellent spray to incapacitate the security guards at the store. Footage of how the assailants destroyed everything in the store went viral.
Eric Nordstrom, CEO of Nordstrom, was asked about the incident days later at a conference with analysts. “Certainly what happened in our Topanga store is disturbing to all of us. But the loss is a concern. Losses from theft are at historic highs. I’d say we find it unacceptable and [it] needs to be addressed. That being said, while it’s unacceptable, it is within our plans. “We have not seen continuing rising of shrinkage that has exceeded what we planned,” he said.
Despite Nordstrom’s assurances, losses from thefts are exceeding most retailers’ forecasts. “Q2 profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers,” said Lauren Hobart, the CEO of Dick’s Sporting Goods, in their second quarter earnings call.
Hobart said “organized retail crime and theft in general” was an “increasingly serious issue impacting many retailers.” “The number of incidents and the organized retail crime impact came in significantly higher than we anticipated,” added Navdeep Gupta, the CFO of Dick’s Sporting Goods, which has more than 850 stores throughout the country and an annual turnover of more than $12 billion.
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