- Target says it expects to lose $500 million in profits this year due to missing inventory.
- It said this is largely due to piracy and organized crime.
- Retailers say shoplifting is becoming a major issue and they are taking steps to crack down on it.
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The company said it expected a $500 million drop in profits this year due to Target’s disappearances, and that this is largely due to theft and organized retail crime.
Announcing its first-quarter earnings results Wednesday, Target CEO Brian Cornell said that while it is “making significant investments in strategies to prevent this from happening,” it expects “inventory to shrink” this year. Will put a big dent in profits. , Cornell would not comment on what steps it is taking specifically to stop the piracy.
Inventory shrinkage refers to when a company has fewer products in its inventory than those stated. These items could have been damaged, lost or stolen.
Last November, the company said that missing inventory had cost it $400 million in profits so far that year and that number could reach $600 million by the end of the year.
Theft and organized crime in the retail industry have been major talking points in recent years, as stores say it is becoming a bigger issue for them. They’re beefing up security and introducing new theft prevention measures in response.
According to research from the National Retail Federation, retail losses are expected to cost retailers $94.5 billion in 2021, up from $90.8 billion in 2020.
Nevertheless, there is some debate as to whether the seriousness of the situation has been exaggerated. Critics say retailers are often blaming piracy for losses while they have no clear idea of what is causing these losses.
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