CNBC reports that Walgreens CFO James Kehoe is conceding that "the company may have overblown concerns about thefts in their stores after shrinkage stabilized over the last year."
“Maybe we cried too much last year,” Kehoe said. “We’re stabilized,” he added, saying the company is “quite happy with where we are.”
CNBC writes that "shrinkage was about 3.5% of sales last year but that number is now closer to the 'mid twos.' He also said the company would consider moving away from hiring private security guards."
According to the story, "Kehoe said the company has spent a 'fair amount' to crack down on the thefts but acknowledged the private security companies they’ve hired have been 'largely ineffective.' These guards can do very little but call law enforcement or hold a suspect until police arrive. "
Walgreens hasn't been alone in its concerns: "Walmart CEO Doug McMillon claimed he might have to close stores and raise prices if the problem doesn’t get under control. Target claimed in its last earnings report that it recently lost $400 million from shrinkage."
- KC's View:
It may be that theft is receding a bit, but that doesn't mean that retailers and the culture don't have a systemic problem - the breakdown of basic rules and the inability/unwillingness to enforce laws. I believe in a compassionate justice system, but the justice part of that construct is just as important as the compassionate part.