Target Corp. is down 13.14% today. The company has been struggling lately, and this latest drop is just another sign of trouble. Target's stock is now worth less than it was a year ago, and the company is facing increasing competition from other retailers. It's not clear how Target will turn things around, but it's clear that the company is in trouble.
The company said it was dealing with more theft and crime at its stores and would invest in training and technology to deter criminal activity.
On the retailer's quarterly earnings call, executives blamed criminal networks for thefts and inventory shortages in their stores. They said Wednesday that they expected the shortages to reduce the retailer's gross margin by more than $600 million this year compared with last year.
Target Chief Executive Brian Cornell said on a call that the company has seen a significant increase in theft and organized retail crime across its business, along with other retailers.
A Target spokesman said Wednesday that retail crime incidents at Target were up 50% from a year ago. He didn’t give a specific number of incidents, but said that Target has more than 1,900 stores in the U.S. Company executives said they expect retail theft and inventory problems to worsen.
Target shares fell 13% on Wednesday after the company's quarterly results failed to meet analysts' expectations. The retailer lowered its forecasts for the holiday season, saying shoppers had slowed their spending in recent weeks in the face of high inflation, rising interest rates and overall economic uncertainty.
Target, Walmart, and Kohl's have all been offering discounts to get rid of excess inventory. This is because consumers have been spending less on goods this year.
Target is working to combat inventory shortages caused by theft. This is a problem that affects many retailers, including Walmart and Home Depot. Target is working with other companies to find a solution to this problem.
A spokeswoman for Home Depot said that organized retail crime was a "modest pressure" on the company during the last quarter. She added that the company has used technology to try to make it more difficult for thieves to steal from stores.
Walmart did not respond to a request for comment on Wednesday.
Target is investing in training and technology to deter theft, with changes already being rolled out in some stores. The company spokesman declined to elaborate on the measures, saying it would defeat the point to outline how the company plans to stop theft.
Retailers in the United States say that theft is becoming a bigger problem. The Coalition of Law Enforcement and Retail, a trade association, has said that organized crime rings have stolen billions of dollars worth of items from stores. Companies including Ulta Beauty Inc. and TJX Cos., which runs TJ Maxx and Marshalls, have said that they have set aside money to investigate and stop thieves.
Some chain stores have closed in recent years due to shoplifting. Walgreens Boots Alliance Inc. said that five of its locations in the San Francisco area were closed last year in part due to retail theft.
Retailers lost $94.5 billion last year due to organized theft, employee theft and other related factors, according to the National Retail Federation's September report. This figure represents an increase from the $90.8 billion lost in 2020.
Last year, a group of 21 retail executives from companies like Target and Home Depot wrote to Congress to express their concern over the growing problem of organized retail crime. They urged legislators to pass a law that would help deter people from selling stolen goods online.
Law-enforcement officials have said that Amazon.com Inc. is one of the biggest outlets for criminals to sell items they have stolen from stores. Amazon has said that it does not allow third-party sellers to list stolen goods, and that it works with law-enforcement agencies and retailers to hold bad actors accountable.
To deter thieves, stores like Home Depot and Best Buy Co. increased security measures during the holiday shopping season last year. This was in response to a spate of high-profile thefts that took place across the U.S. over Thanksgiving and Christmas.
As a leading independent research provider, TradeAlgo keeps you connected from anywhere.