RALEIGH — Retail crime, violence and theft continue to impact the retail industry at unprecedented levels, according to the National Retail Federation’s annual Retail Security Survey.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” National Retail Federation President David Johnston said in a statement. “Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.”
The survey, conducted in partnership with the Loss Prevention Research Council covers 177 retail brands and represents over 97,000 retail locations across the United States spanning 28 retail sectors.
The average shrink rate in FY 2022 increased to 1.6% over 1.4% recorded the year prior. In dollar figures, that 1.6% represents $112.1 billion in total retail sales, according to the survey. NRF’s previous annual survey found losses from shrink came in at $94.5 billion in 2021, up from $90.8 billion in 2020.
“While retail shrink encompasses many types of loss, it is primarily driven by theft, including organized retail crime (ORC). Theft – both internal and external – accounts for nearly two-thirds (65%) of retailers’ shrink. However, for some sectors, theft can represent more than 70% of overall shrink,” the survey’s findings say.
Additionally, the survey found that the number of violent shoplifting incidents had increased by 35% on average and included ORC incidents.
“Last year, 81% of respondents reported that ORC offenders had grown more violent,” per the survey results. “Compounding that this year, more than two-thirds (67%) of respondents said that they were seeing even more violence and aggression from ORC perpetrators compared with a year ago.”
Due to these thefts, 45% of retailers reduced operating hours, 28% closed stores, and 30% reduced product availability.
Top cities being hit by ORC include Los Angeles, Calif; San Francisco/Oakland, Calif.; Houston, Tex.; New York City, N.Y.; Seattle, Wash.; Atlanta, Ga.; Sacramento, Calif.; Chicago, Ill., Denver, Colo.; Miami, Fla.; and Albuquerque, N.M.
ORC has driven store closures and extreme measures for some retailers like Target, which has put merchandise into locked cases in some of its stores. In May, the company warned it was on track to lose half a billion due to rising theft. Target said in Sept. that theft was the root cause behind the upcoming closure of nine stores. The nine locations will close by Oct. 21 and include one in New York City, two in Seattle, three in Portland, and three in San Francisco and Oakland.
Meanwhile, big box clubs like Sam’s Club and Costco that have memberships, larger items, and that have secured entry/exit areas, are not seeing such thefts.
On the issue of policies to combat retail theft, 72% of NRF survey respondents wanted increases in the average value per incident and increased felony thresholds, and 92% supported federal OCR legislation.
Additionally, 67% reported an increase in repeat offenders, a situation often tied to areas that have reduced or eliminated cash bail.
This past January, a bill was filed in the U.S. Senate by Sen. Chuck Grassley (R-IA) that would establish an Organized Retail Crime Coordination Center within the Department of Homeland Security to crack down on ORC. The bill has seen no movement since its filing.
In North Carolina, retail crime has been an increasing concern following the 2020 pandemic.
During 2020, retail thefts had increased in Durham by 83% and 97% in Fayetteville. The following year, in September, the Cabarrus County Sheriff’s Office broke up an ORC, recovering around $400,000 in merchandise stolen from Lowe’s, Home Depot, Target, Kroger and other retailers.
Just this past year, Raleigh has seen an increase in “smash-and-grab” theft, some of which have involved violence, according to some media reports. The city and its police department have apparently struggled to address crime in the downtown area and recently announced the hiring of private security to combat the issue.
In an interview with North State Journal, North Carolina Retail Merchant Association (NCRMA) President and General Counsel Andy Ellen said the state was “definitely seeing an uptick” in ORC. He cited several major cases in the western part of the state such as a case of a half million in Kings Mountain, west of Charlotte.
During 2022, Law enforcement in Charlotte took down an ORC that had been targeting stores like CVS, Walgreens, Publix, Target and Walmart over a three-year period. The ORC ring there had amassed over $5 million in stolen goods during that time period.
Per a report on retail theft impact from the Retail Industry Leaders Association, North Carolina businesses have seen over $3.3 billion in economic losses with more than 18,000 jobs lost and lost wages of over $944 million. Additionally, 76% of retail asset protection managers surveyed said an ORC criminal has physically assaulted an associate.
“Two things that I think are noteworthy: One, I think the groups are more brazen than they have been in the past,” Ellen said. “And the second piece is our General Assembly, in a bipartisan manner, have really worked hard to make sure we gave district attorneys and law enforcement tools to prosecute those cases with active time.”
In June 2022, the North Carolina legislature enacted a law increasing felony levels and jail time for thefts committed by ORC rings. The law includes additional penalties for damage to property or assault of a person during an ORC theft, requires high-volume third-party online sellers like Amazon to require seller verification and track activity on their platforms, and gives prosecutors and law enforcement tools to connect cases where stolen goods across county lines to raise criminal penalty and fine levels.
The NC Organized Retail Theft law was enacted just months after a Joint Legislative Oversight Committee on Justice and Public Safety hearing on retail theft. A representative of the Raleigh Police Department told the committee over 2,100 retail theft cases were recorded between April 2021 and April 2022 and that 86% of retailers reported verbal threats made to their employees with 75% reporting an employee was actually assaulted.
Other individuals from major retailers like Lowe’s Home Improvement told the committee that these rings had sophisticated planning and coordination.
Ellen agreed that ORC planning and coordination is a real issue.
“The issue I think you see too is for so long, people saw shoplifting as the kid that stole a pair of sunglasses or they stole a T-shirt – and that’s not what you have,” Ellen said. “You have very sophisticated organized groups using a lot of technology, using people that are, unfortunately, depending on drugs or opioids sometimes, as the people that actually steal the items.”
Ellen said many of the ORC rings are interstate operators and those committing the crimes are often linked to drugs and human trafficking.
“They’re going with a shopping list of what they would like stolen,” said Ellen. “But this organized retail crime is also very much tied into things like opioids that was tied into human trafficking and other things that are crimes against people.
“These are not just crimes against property and unfortunately we all pay for this shoplifting because it eventually gets embedded in the cost of the goods that we buy,” Ellen said, adding that the items that go out the door translate into stores being forced to increase prices.”
Ellen said ORC is not just a local or state problem, but it’s Interstate and international as well.
“You see a lot of these organized retail crime gangs moving up and down the East Coast and you know, utilizing our interstates to do things,” said Ellen. “Unfortunately, some of these things are right off the highway – made for easy access.”
He went on to say that he thinks the words gets out that North Carolina has really stepped up and has sent a strong message with the criminal penalties now in place that this activity won’t be tolerated here.