Organized Retail Crime is a $100B National Problem

Store security and anti-theft measures have become a top priority for retailers across the US as they combat a wave of shoplifting and deteriorating safety conditions in downtown locations where foot traffic has declined.

Unfortunately, the problem isn’t limited to sticky-fingered individuals preying on lax security at a growing number of self-checkout kiosks in groceries or even the high-profile “flash mobs” that form in minutes over social media and show up to ransack a store.

What the authorities are calling organized retail crime (ORC) has become a multi-billion-dollar national problem for retailers—professionals who send out groups of thieves to steal from stores and delivery trucks and then hand the goods over to co-conspirators who convert them to cash by reselling them.

What retailers call “shrink” due to theft and organized retail crime (ORC) exploded during the pandemic—everyone wearing masks was a perfect storm for “boosters,” another name for ORC thieves—metastasizing into an endemic national condition in the emerging post-pandemic economy.

According to the National Retail Federation, ORC has become the main contributor to an estimated $100B in shrink in the US that retailers now absorb on an annual basis. More than half of the respondents to an NRF survey earlier this year said ORC is increasing, GroceryDive reported. 

ORC has impacted operations at Walmart, Target, Kroger and other industry giants. Target estimated in its Q1 earnings report that retail theft will reduce its 2023 profitability by more than $500M.

ORC criminals often target health and beauty products, food and beverages, housewares, office supplies and infant care products that are easily resold.

Grocers are forming in-house ORC teams staffed with trained investigators who work with local law enforcement to take down ORC rings. A third of the retailers surveyed by NRF said they have established a dedicated ORC team.

An array of technology also is being deployed aimed at deterring theft and protecting display cases. Kroger and Safeway have announced pilot programs to install locked display units that customers can gain access to with their phones.

Indyme, the company that produces the units, calls them Freedom Cases. Indyme also deploys cameras positioned at store exits and audio speakers that can broadcast warnings to would-be boosters.

Harris Teeter is installing a camera system over its self-checkout kiosks. The system alerts customers if they fail to scan an item; the system alerts a store employee when the shopper doesn’t scan a second item.

At least one company is addressing the problem the old-fashioned way: by putting cops in the stores.

Walmart’s Vine City Supercenter in Atlanta, which closed last year after a fire, is slated to reopen next May after being converted from a supercenter to a Neighborhood Market. When it reopens, the outlet will become the first Walmart store based on that format to include a police substation, GroceryDive reported.

According to Mayor Andre Dickens, the substation will not be occupied at all hours. The mayor described it as an area where Atlanta police officers can meet and file paperwork as well as charge their phones and body cameras.

Meanwhile, a bill has been proposed in Congress to establish an Organized Retail Crime Coordination Center within the Department of Homeland Security that would consolidate efforts by federal, state and local law enforcement to combat ORC.