In a recent announcement, Target revealed its plans to close down nine stores across four states, citing concerns over safety for its employees and customers.
The affected locations include one in New York City’s East Harlem neighborhood and three in the San Francisco Bay Area.
Additionally, three stores in Portland, Oregon, and two in Seattle will also be shut down. Target emphasized that despite these closures, it will still maintain a presence in these markets with a total of 150 stores.
In an effort to support affected employees, the company will provide them with the opportunity to transfer to other stores. Target acknowledged that the decision to close these stores was not an easy one.
In a formal statement, Target acknowledged the crucial role its stores play in their respective communities. However, the retail giant emphasized that its success is contingent upon ensuring a safe working and shopping environment for all.
Target recognizes that the well-being and security of its employees and customers are paramount, and it is committed to upholding these standards.
By prioritizing safety, Target aims to foster a sense of trust and reliability within its stores, thereby solidifying its position as a reputable and responsible retailer.
The company’s dedication to creating a secure atmosphere underscores its understanding of the integral connection between a safe environment and overall success.
Target’s statement serves as a reminder of the importance of maintaining a harmonious and secure space for both employees and customers, ultimately contributing to the overall well-being of the communities it serves.
Target has made significant investments in various strategies to combat theft, including the addition of more security personnel, the utilization of third-party guard services, and the implementation of theft-deterrent measures such as locking up merchandise.
Furthermore, the company has provided comprehensive training to store leaders and security-team members to ensure their safety and enable them to de-escalate potential safety issues.
However, despite these efforts, Target acknowledges that it continues to face substantial challenges in operating its stores securely, and the business performance of the locations slated for closure has become unsustainable.
Although the number of store closures represents only a small fraction of Target’s nationwide presence of 1,900 stores, this decision highlights the difficulties that retailers encounter in their endeavors to minimize theft, safeguard their employees and customers, and maintain stores in areas where alternative shopping options may be scarce.
To illustrate this, consider the Target store in East Harlem, which serves as one of the few nearby options for residents to purchase high-quality, nutritious food.
Similarly, the store in San Francisco, slated for closure, is situated under a bustling overpass on 13th Street and Folsom, amidst homeless encampments in a primarily commercial neighborhood with automotive shops.
The other two Bay Area stores facing closure are located in Oakland and Pittsburg, while one of the stores in Seattle is positioned on a busy avenue adjacent to the University of Washington.
Target CEO Brian Cornell has been vocal about the escalating issue of theft in the retail industry over the past year.
Despite facing mounting losses, Cornell has remained firm in his stance against closing stores.
Target reported in May that theft was significantly impacting their bottom line, with projected losses expected to be $500 million higher than the previous year.
Last year, theft losses were estimated to be between $700 million and $800 million, indicating that losses could surpass $1.2 billion this fiscal year.
Furthermore, Cornell informed analysts in August that violent incidents against Target employees had increased by 120% during the first five months of the year compared to the same period last year.
He expressed concern over the rising number of safety incidents associated with theft, emphasizing that the situation was moving in an unfavorable direction.
This announcement comes at a time when Target is still dealing with the aftermath of facing backlash for its support of the LGBTQ+ community, particularly through its displays of Pride Month merchandise.
In late May, prior to Pride Month, Target made adjustments to its merchandise offerings in certain regions and took other precautionary measures due to hostility from customers.
Instances of customers confronting workers and tipping over displays prompted Target to prioritize the safety of its employees.
The extent of financial losses suffered by retailers as a result of organized retail crime remains unclear, as does whether the problem has seen a significant increase.
However, the issue has garnered more attention in recent years due to high-profile incidents of smash-and-grab retail thefts and flash mob robberies that have received national media coverage.
Several retailers, including Dick’s Sporting Goods and Ulta Beauty, have acknowledged the rise in theft and its impact on shrinking profits in recent quarters.
Walmart CEO Doug McMillon has recently expressed concerns about the rising incidence of theft at stores.
In December, he spoke to CNBC about the issue, and in August, he told analysts that action needed to be taken to protect people from crime, including theft, in certain jurisdictions in the U.S.
The National Retail Federation, the largest retail trade group in the country, has released its latest security survey, which reveals that inventory loss, known as shrink, was at an average rate of 1.6% last year, amounting to $112.1 billion in losses.
This is an increase from the previous year’s figure of 1.4%. The survey found that the bulk of the shrink, 65%, resulted from external theft, including products stolen during organized shoplifting incidents.
The trade group also revealed that more than two-thirds of respondents reported an increase in violence and aggression from perpetrators of organized retail crime compared to the previous year.
Although retailers are continually improving their loss-prevention measures, the NRF believes that more drastic action may sometimes be necessary.
Almost 30% of retailers surveyed reported being forced to close a specific store location, while 45% had to reduce operating hours.
Around 30% said they had to change or reduce product selection in stores due to retail crime.
In response to the issue, Congress passed the INFORM ACT in late 2022, which aims to combat the sale of counterfeit goods and dangerous products by requiring online marketplaces to verify various types of information for sellers who make at least 200 unique sales and earn a minimum of $5,000 in a given year, including bank account, tax ID, and contact details.
Target announced on Tuesday its commitment to strengthening its cyber defense capabilities in order to effectively combat retail theft and fraud.
Recognizing the increasing prevalence of cyber threats in the retail industry, Target has taken a proactive stance by partnering with the U.S. Department of Homeland Security’s Homeland Security Investigations division.
This collaboration aims to leverage the expertise and resources of both entities to develop robust strategies and technologies to safeguard against illicit activities in the retail sector.
By joining forces with a government agency renowned for its proficiency in national security matters, Target is demonstrating its dedication to protecting its customers, employees, and stakeholders from the detrimental effects of cybercrime.
The company’s investment in cyber defense underscores its recognition of the evolving nature of criminal activities and the need for continuous innovation in security measures.
Through these efforts, Target aims to establish itself as a leader in retail security and serve as a role model for other organizations in the industry.