US retailers add cameras, steel cables to deter holiday crime amid soaring inflation

Make-up and other beauty products are locked behind plexiglass in the Ulta Beauty section of a Target store in New York on Nov 17, 2022. PHOTO: REUTERS

NEW YORK – Retailers in the United States are installing cameras or locking away items to deter shoplifters and thieves as they brace themselves for a post-pandemic rush of holiday shoppers in 2022.

Some – including Walmart, JCPenney, Apple and Walgreens – put in place new surveillance systems or more security guards. Others, such as Target and Barnes & Noble, sealed merchandise behind plexiglass or tethered it with steel cables to shelves in stores.

The retail industry has decried theft this holiday season, as it struggles with excess inventories and a pullback in consumer spending at a time of high inflation.

“Sales are suppressed,” said Mr Burt Flickinger, managing director at retail consulting company Strategic Resource Group.

“Profits are being punished at the time of the highest inflation in 42 years. And now with the cost of preventing crime going up, that is going to be passed along in higher prices.

“Nowadays, you can see shampoos are locked up, along with acetaminophen and Tylenol and multipacks of toothpaste… People planning to shop in stores will not want to go in to these locked and over-secured stores. So overall, retailers lose both the planned purchases and the impulse purchases,” Mr Flickinger added.

Crime has been in the spotlight since a spate of brazen, violent store thefts, including a smash-and-grab incident during the holiday season in 2021 where 80 people rushed into a Nordstrom near San Francisco and ran out with armfuls of merchandise, injuring five employees. One survey by the National Retail Federation cited a 26.5 per cent jump in 2021 in “organised retail crime” carried out by groups of people.

But it is unclear whether overall US retail crime is on the rise, with little data available on the problem. Total losses from shoplifting, theft, fraud and errors for US retailers in 2021 remained steady at an average rate of 1.4 per cent of total sales, as it had been over the previous five years.

Still, retailers are diverting more resources towards security this quarter, which could add pressure on margins already squeezed by higher petrol, transportation, labour and raw material costs.

Part of the problem is that prosecuting petty crime is a hassle, and some states raised their thresholds for the value of merchandise stolen to around US$1,000 (S$1,400) to trigger a felony charge. That puts the onus on preventing crime in the first place, especially during the Thanksgiving weekend that is expected to see a record shopper turnout. The busy holiday season represents nearly 20 per cent of total US retail sales for the year.

Major consumer products companies such as Procter & Gamble are annoyed – and so are shoppers.

Procter & Gamble last week said it is investing in in-store displays to avoid having its razor blades stuck inside a glass casing, while shoppers complain the locked displays and cables slow them down and force them to find staff who can set the merchandise free.

Mr Rex Freiberger, a 40-year-old Los Angeles resident, said he has noticed “more and more items” placed behind plexiglass at the Walmart where he shops for holiday gifts.

“My biggest pet peeve about having so many items behind locked doors is when stores don’t have enough workers on the floor to help unlock those doors,” he said.

Retailers rarely openly acknowledge the threat of theft or crime because they generally do not want to spook shoppers.

But Target last week said it saw a “precipitous decline” in discretionary spending and disclosed that theft could wipe out more than US$600 million in gross profit in 2022. That represents nearly 2 per cent of the US$31 billion in gross profits it earned in 2021.

Apple started posting a plain-clothes security guard at its stores more often in recent weeks after thieves at a few locations stole iPhones straight out of employees’ hands, a person familiar with the matter said. REUTERS

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