Retailers Struggle With Mounting Losses Due to Theft

At the beginning of the month New York Gov. Kathy Hochul introduced a $40 million package aimed at combating the rising retail theft across the state. It included retail-focused anti-theft teams for police and legislation proposals that increase penalties for anyone who assaults retail workers, as well as a $5 million tax credit to help small business owners invest in security for their shops.

Retail theft, particularly organized theft, has become a mounting problem for store owners and one that is increasingly dictating the question of whether a particular location should remain open.  Officials are starting to take note and put in place measures to help stem the tide. And what a tide it is: according to the National Retail Federation’s most recent Retail Security Survey,  $112.1 billion was lost in 2022 to retail theft, up from 2021’s $93.9 billion.

It has become a significant problem, says Mark Sigal, CEO of Datex Property Solutions, who tells GlobeSt.com that the risk of violence or litigation deters store-level personnel from confronting petty criminals, especially as theft escalates into coordinated syndicates. Sigal, from San Francisco, highlights the link between community behavior incentives and crime rates, emphasizing the need for balanced enforcement measures by city authorities.

According to Sean Unsell, RDC senior studio director and associate principal, the widespread impact of organized retail theft is huge, affecting not only major retailers but also smaller family businesses. He notes the adoption of various technologies and security measures by retailers and developers to combat theft, alongside governmental efforts such as task forces and grant funding to address the issue.

Chris Carley, Capstone Advisors VP of leasing, warns of store closures in affected areas as a consequence of escalating theft problems, signaling a troubling outcome for retailers and Sandy Sigal, president and CEO of NewMark Merrill, stresses the imperative for proactive strategies among retailers to mitigate organized theft’s substantial impact on margins and customer retention.

Collaboration between owners, retailers, law enforcement, and policymakers, alongside technological solutions, Sigal says, is deemed essential in addressing this challenge and shaping future retail site evaluations and locations.