Walmart has announced the closure of more “underperforming” stores alluding to increasing thefts. The retail giant announced the additional closures after at least six were shuttered in 2022.
The upcoming store closures come shortly after Walmart CEO Doug McMillon warned in December that retail theft is “higher than what it has historically been” and that if not corrected over time, “prices will be higher, and/or stores will close.”
A September report by the National Retail Federation found that retail theft and other inventory loss—known as “shrink”— had an average rate of 1.4 in 2021, which is consistent with the past five years.
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Retailers, on average, saw a 26.5 percent increase in organized retail crime incidents in 2021, according to the report. Target announced it had lost over $1 billion to theft.
When taken as a percentage of total retail sales in 2021, that shrink rate represents $94.5 billion in losses, up from $90.8 billion in 2020, which the federation said is primarily been driven by theft, including theft as part of organized retail crime.
Walmart is set to close stores in New Mexico, Illinois and Wisconsin. This comes after last year’s closures in Connecticut, Alabama, Ohio, Kentucky and Pennsylvania.
Other locations, which are only pickup centers and not retail outlets, are also closing.
Store thefts across the nation have gone viral on social media. Videos, often taken by other customers, show shoplifters walking out of retailers with arms or shopping carts full of items.
The problem has been exacerbated by some municipalities announcing new policies not to prosecute thefts valued under $600. That has put pressure on retailers.
“I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it,” McMillon said in an interview on CNBC.
But the thefts mean more locations may be on the chopping block.
The CEO stopped short of stating exactly which locations could be shuttered due to rising theft incidents.
Many large retailers, including Walmart, began locking some higher-priced items away in cabinets or storing them behind glass shields. Still, such measures haven’t always proven successful.
–wire services