Walmart has closed more than 160 underperforming locations in 27 states since 2016, affecting 10,000+ employees, but on Dec. 6, Walmart CEO Doug McMillon warned that historically high retail theft could lead to price increases and more store closures if the problem persists.
“Theft is an issue. It’s higher than what it has historically been,” he told CNBC’s “Squawk Box.”
A rising number of high-profile smash-and-grab thefts led stores to deploy new anti-theft measures while trying to remain inviting to customers.
Higher prices could be a problem for Walmart.
“Walmart’s brand promise, from day one, has been rooted in everyday low prices. The bare-bones shopping experience was almost a point of pride,” wrote Jeff Sward, founding partner at Merchandising Metrics, in response to an April 29 Retail Wire report. “That was the deal. That was the trade off — low prices for a no frills shopping experience.”
Theft deterrents in Walmart stores include surveillance systems, more items behind glass, steel cables to tether products to shelves and empty boxes that shoppers can bring to a cashier to receive the item.
“It’s a triage-type scenario,” said Home Depot Vice President of asset protection, Scott Glenn, earlier this year. “It’s ‘Stop the bleeding and give yourself some time.’”
Ranked as the No. 1 global retailer by the National Retail Federation, Walmart had $84.34 billion in international retail revenue as of April 2022. The company has 10,431 stores — about half of them, domestically.
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Other big-box retailers are dealing with increased theft. Target Chief Financial Officer Michael Fiddelke said in November shoplifting had increased about 50 percent year over year, resulting in more than $400 million in losses in this fiscal year, CNBC reported.
When asked on Tuesday how local jurisdictions handle shoplifting cases, McMillon said a lax approach from prosecutors could impact prices and lead to store closures in the future.
“If that’s not corrected over time, prices will be higher, and/or stores will close,” McMillon said. “It’s really city by city, location by location. It’s store managers working with local law enforcement and we’ve got great relationships there for the most part.”
Most people attribute higher prices to the economy and inflation. Walmart grocery prices increased by 21.5 percent between July 2019 and July 2022
The mention of closing “underperforming locations” is consistent with Walmart company practice when closing stores, according to NewsBreak contributor Joel Eisenberg, who writes extensively about Walmart.
“Multiple outlets are reporting plans for future Walmart closures,” Eisenberg wrote in a Nov. 21 Newsbreak report, with an accompanying list.