Shoplifting has been on the rise for many major retailers, and Walgreens is no exception. The company recently disclosed that it’s suffering a spate of losses, also known as “shrink,” in the retail world. It’s an issue that has made the pharmacy giant reassess anti-theft strategies-most of which would not necessarily please customers.
Why is Walgreens losing money to shoplifting?
Retail theft is not just a small inconvenience for Walgreens—it is a big financial problem. According to Tim Wentworth, CEO of Walgreens Boots Alliance, the company has seen a 52% jump in shrink this year. Shrink includes losses from theft, damaged products, and inventory discrepancies, but shoplifting is one of the largest contributors.
Wentworth described dealing with shoplifting as “hand-to-hand combat,” emphasizing how challenging it has been to find effective solutions that do not harm the shopping experience.
What is Walgreens doing to combat shoplifting?
Walgreens has taken many measures aimed at preventing such thefts, including:
- Locking up products: Products such as toothpaste and razors have been locked up behind display cases, particularly in high-theft areas.
- Improved security: The company has installed more surveillance cameras in strategic positions to make sure that whatever goes on in the store is captured.
- Employee training – More of the employees have also been trained to handle suspicious activities in a more effective way.
But locking up the merchandise has proved problematic in its own way. As Wentworth observed, “When you lock things up…you do not sell as many of them. We have kind of proved that pretty conclusively.”
The next step: unpopular but necessary changes
These challenges have made Walgreens seek creative solutions that can balance security with customer convenience. While the company has not fully disclosed all the details, it is considering measures that may include:
- Expanding self-checkout technology: limiting direct access to some products but still making these products available through automated systems would make ensure that theft incidents are reduced while customers get to shop smoothly at the same time.
- Cooperation with law enforcement: Strengthening relations with local police might prevent shoplifting.
- Body cameras on employees: Very controversial, yet some retailers have been using it as a means of improving safety and accountability.
These moves reflect Walgreens’ efforts to try to reduce thefts without driving away customers who may find locked-up products frustrating.
What does this mean for shoppers?
If you area regular Walgreens customer, you may notice many more differences in how it does business. Here’s what you can expect:
- More products locked: You may need to ask an employee for help more often.
- This can involve longer checkout times: security might involve verifying purchases at self-service checkout stations, slowing things down.
- Smaller store footprints: Walgreens would close as many as 1,200 under-performing locations over the next three years, which would reduce the number of nearby options available to some shoppers.
Why are these measures necessary?
The impact of shoplifting goes beyond the goods stolen, to Walgreens. Losses from theft may affect profitability, push up costs, and translate to forcing honest customers to pay more. The chief executive said these were unpopular measures necessary to continue running a sustainable business as retail crime was on the rise.
But despite these headwinds, Walgreens said it has seen better-than-expected earnings this year partly due to efforts toward cost reductions and operational changes. By clamping down hard on shoplifting, it is protecting its bottom line while serving customers effectively.
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