Walgreens executives say chain loses 50% more money due to loss and theft
- Walgreens’ shrinkage rate, or items lost due to theft and damage, was 50% higher over the past 2 years.
- âThese are gangs that come in and empty our beauty stores,â said CEO Roz Brewer.
- Retailers lost a record $ 61 billion to theft in 2020, according to a National Retail Federation survey.
Walgreens has lost 50% more revenue due to theft and damaged items over the past two years.
Roz Brewer, managing director of Walgreens Boots Alliance, said the company had a shrinkage rate, or inventory loss attributed to theft, fraud and damage, of around 3.25%. The shrinkage rate was just over 2% 10 years ago, she added.
Brewer said the past two years have resulted in a 40 to 50% increase in shrinkage, largely due to organized crime.
âThis is no small theft,â Brewer said in a phone call with investors on Jan.6. “It’s not someone who can’t afford to eat tomorrow. It’s gangs coming in and emptying our beauty stores. And that’s a real problem.”
Walgreens reported net income from continuing operations of $ 2 billion for the 12 months ending August 31. With an unknown shrinkage rate of 3.25%, the company could have lost $ 65 million of its bottom line last year due to the theft.
According to the National Retail Federation, U.S. retailers lost about 1.62% of their revenue due to the contraction in 2020, to a record $ 61.7 billion.
Retailers said the growth of third-party e-commerce stores has exacerbated retail crime. Two retail spokespersons told Insider’s Ãine Cain that anonymous online merchants can make it easier for thieves to market their loot without attracting suspicion.
Twenty retailers, including Target, Best Buy and Kroger, have called on Congress to pass legislation to tackle illegal business activities by anonymous online sellers.
âNot only is the retailer having the merchandise stolen, someone is competing with them online by selling the same product for half the price because it’s stolen,â Scott Glenn, vice president, told Insider. protection of the assets of Home Depot. âSo this is really hitting retailers from many directions. “
Some have questioned whether retailers are being honest about the extent of retail theft.
FBI crime statistics have shown burglaries, thefts and thefts to reach all-time highs in 2020. The San Francisco Chronicle found that San Francisco police data did not support Walgreens’ explanation, according to Walgreens. which he closed five stores due to an organized retail theft. Stores slated to close have had “less than two recorded shoplifting incidents per month on average since 2018,” according to the report.