Under siege: Retailers flee cities as unarmed security, public authorities fail to curb thefts
Washington DC February 8, 2024
Businesses have cited the rise of online shopping and declining in-store profits for pulling out of urban centers from San Francisco to New York, but insiders see a deeper problem:
Unarmed security staff’s inability to keep employees and merchandise safe is driving away workers and shoppers in big cities with soft-on-crime policies.
- Last week, armed thieves stabbed a loss prevention officer who attempted to stop them from looting a Safeway supermarket in Kensington, Maryland, just outside the District of Columbia.
- In December, a thief fatally stabbed a Macy’s security guard in Philadelphia.
- In April, a Home Depot security guard in Pleasanton, California, was gunned down after he caught a woman stealing.
Walmart and Target each eclipsed $500 million in retail theft losses last year, so the retail giants’ store closures in cities “where theft has gotten out of control” are no surprise, said Kristin Moss, chief ambassador for DealAid.org, which offers online discounts for more than 10,000 U.S. retailers.
Last year, Target closed nine stores in New York City, San Francisco, Seattle, and Portland, Oregon, over safety concerns. Ms. Moss pointed to data showing a concentration of Walmart stores with the highest retail losses in cities with the lowest prosecution rates for shoplifting.
“This is a trend common among retailers and small businesses that are forced to leave such areas,” she told The Washington Times.
An analysis by J.P. Morgan found San Francisco, Los Angeles, New York, Seattle and Miami had fewer retail businesses in the fourth quarter of 2023 than before the pandemic.
More merchants are pulling out of inner cities as corporate offices order employees not to interfere with thefts. They have opted to absorb the losses rather than risk the liabilities of violent confrontations.
Stores nationwide have locked specific merchandise, such as Dove soap, behind plastic shields, hired unarmed security guards and trained employees to deter theft without violence.
The trend has even reached stores that eliminated positions and converted to self-checkout to save money during pandemic labor shortages.
According to a DealAid.org study, businesses that replaced staff with self-checkout terminals reported increases of up to 50% in retail thefts last year. As a result, 37.1% of retailers increased the sizes of their loss prevention and asset protection teams and placed additional security and employees near self-checkout terminals to reduce theft.
Such efforts have had mixed results. Last year, Nike decided not to reopen a store in Portland because of rampant theft, and Walmart started a “police workspace” at an Atlanta store to discourage crime.
Major retailers have lobbied Congress to enact legislation establishing an organized retail crime coordination center under the Department of Homeland Security.
Meanwhile, elected officials in the hardest-hit cities have pressured businesses to deal with the problem themselves.
“Instead of cleaning up the streets and prosecuting wrongdoing, city governments are passing the buck along to Main Street business owners,” said Andrew Crapuchettes, CEO of RedBalloon, an Idaho-based workforce recruiting agency.
He pointed to a New York City proposal to make business owners hire more unarmed security guards and train employees to handle thefts.
A recent RedBalloon/Public Square survey found that 81.7% of business owners expressed concern about a lack of prosecution for thieves.
Big-box clothing companies have led an exodus from city centers to the suburbs.
Abercrombie & Fitch Co. closed its store in Chicago’s downtown Water Tower Place mall in 2020 and opened a store the following year in the Lakeview suburb, where online purchases had soared.
“Macy’s, Abercrombie & Fitch and Kohl’s are the ones that have been leading this trend of coming closer to their customers, replicating the move out of city centers and into suburbs that citizens have made since the pandemic,” said Daniel Lacalle, a professor of global economics at IE Business School in Spain.
Grocery stores have been more reluctant to pull out because of concerns about turning neighborhoods into food deserts, but some food companies said they have chosen to sell high-end products online rather than risk placing them on store shelves in some states.
“We’re not going to put our items on the shelf when we know someone can just walk out with them,” said Jason Nelson, co-founder of Prepper Beef in Waco, Texas. “If you’re not prosecuting people for theft, it only encourages people to steal.”
Mr. Nelson said he has turned down requests to sell his freeze-dried beef in grocery stores in California, New York City and Atlanta. His company of 20 employees processes 38,400 pounds of beef each month to sell online for $89 to $150 per 12-ounce bag.
In December, a Forbes Advisor analysis of retail crime data from the U.S. Chamber of Commerce and the FBI found the average tax revenue loss from retail crime in all 50 states was $36.46 per resident.
That same month, a report from Capital One found that states lost $4.345 billion in tax dollars from retail theft in 2022.
Several leading retailers did not respond to The Times’ requests for comment.
A spokesperson for California Gov. Gavin Newsom noted that the Capital One report showed the $8.72 billion the state lost to retail theft was 17% lower than the national average among states in 2022.
California gave $267 million to law enforcement agencies in October to fight retail crime. The governor hailed it as the largest investment of its kind in state history.
“Enough with these brazen smash-and-grabs. We’re ensuring law enforcement agencies have the resources they need to take down these criminals,” Mr. Newsom said.
Retailers could use all the help they can get, said Mark D. Solomon, a vice president of the International Association of Financial Crimes Investigators, a California-based nonprofit.
Mr. Solomon noted that businesses also have faced a rising tide of smash-and-grab organized rampages and sophisticated digital scams as soft-on-crime prosecutors decriminalize theft and reduce penalties in big cities.
“The increase in crime impacts everyone,” he said. “Employees don’t want jobs where they can get hurt or sued. Businesses are wanting to serve and operate in these communities, but the risk is outweighing the benefits.”
