My, my my...how quickly we go from a couple kids just looting to feed their families to "organized crime rings plaguing retailers". Seems like we made the transition in just a couple of years and no Soro-appointed DA even noticed!
But alas these crime rings were the topic of a new CNBC report which spent 8 months investigating organized retail crime rings.
Organized retail theft has emerged as a significant concern for both large and small retailers, contributing to reduced profits, staffing challenges, and a diminished shopping experience. This issue has also garnered bipartisan public frustration over increased security measures, such as locking products behind glass, the report notes.
The rise of such crime is debated, with retailers like Target, Foot Locker, Walgreens, and Ulta reporting escalating theft issues, though specifics on frequency and financial impact are often not disclosed. This has led to suspicions that retailers might be attributing operational shortcomings to crime, as we have alluded to numerous times here on Zero Hedge and on our X account.
According to the National Retail Federation, $40.5 billion was lost to external theft in 2022, accounting for 36% of inventory losses, a slight decrease from the previous year. Despite debates on its direct impact on profits, the perceived threat to employee and customer safety is clear.
Adam Parks, an assistant special agent in charge at HSI, which is the main federal agency investigating retail crime, told CNBC: “We’re talking about operations that have fleets of trucks, 18-wheelers that have palletized loads of stolen goods, that have cleaning crews that actually clean the goods to make them look brand new.”
“Just like any business, they’ve invested their capital into business assets like shrink wrap machines, forklifts. That is what organized theft looks like, and it actually is indistinguishable from other e-commerce distribution centers,” he continued.
In response, both local and federal law enforcement efforts against organized retail crime have intensified. Homeland Security Investigations (HSI) significantly increased its actions, with cases and arrests rising sharply between 2021 and 2023. The California Highway Patrol reported a 170% increase in arrests for organized theft in 2023 compared to 2022, though it remains uncertain if this reflects a genuine spike in theft or enhanced enforcement efforts driven by increased public and industry pressure.
Ulta CEO Dave Kimbell said: “The financial impact is real, but way more important is the human impact, the impact it has to our associates, the impact it has to our guests.”
“It also impacts the communities in which we live. If people don’t feel safe going in to shop in certain areas of a community, it really has an impact and can change neighborhoods and change communities over time,” he continued.
In New Orleans, the investigation unearthed security video that captured a man walking into a Walgreens, going straight to the cosmetics section, and filling a plastic bag hidden in his pants with 17 nail polish jars, worth about $200. He then proceeded to the main branch of the New Orleans Public Library, about half a mile away, and sold the stolen items to a security guard, according to police.
In San Jose, the California Highway Patrol discovered a vast array of new merchandise, including detergents like Gain, Tide, and Downy, Gillette razors, Olay moisturizer, Allegra allergy pills, and sparkly silver boots with T.J. Maxx tags, in a home and storage unit linked to a suspected organized retail theft ring.
In total, nearly 20,000 items, worth over $550,000 and believed to be stolen from T.J. Maxx and various drugstores and grocery stores in the Bay Area, were found at five locations associated with the group.
In San Diego, police uncovered "a multimillion-dollar criminal scheme" involving shoplifting and then selling the items on Amazon. One scheme participant texted back in January 2023: “I’m not stealing regular I’m going to start filling up my bag quick. So I want to know stuff I can grab in bulks too.”
After that, the suspect committed at least 10 thefts at Ulta stores across California. But don't worry - AOC says these shoplifters are just 'hungry' people seeking bread to feed their family with.
You can read CNBC's full investigation, including details of thefts in individual cities, here.
