Target is closing nine stores in four states next month because of widespread theft and organized retail crime, the Minneapolis-based retailer announced Tuesday.
The closures, all slated for Oct. 21, include one store in Harlem in New York City; two stores in Seattle; three stores in San Francisco-Oakland, California; and three stores in Portland, Oregon.
“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” Target said in a statement. “We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all.”
Target last month lowered its sales forecast for the remainder of the year after posting its first quarterly drop in earnings in six years, noting that shrink would cost it more than $500 million more this year versus a year ago. Theft has worsened, the retailer said, and Target stores reported a 125% increase in violence and threats of violence during the first five months of 2023, CEO Brian Cornell told analysts.
Target said it has “invested heavily” in strategies to combat theft and organized retail crime, including adding more security personnel, hiring third-party guard services and rolling out “theft-deterrent” tools chainwide.
Other security measures have included locked merchandise cases, enhanced worker training, investments in cyber defense, partnership with the U.S. Department of Homeland Security’s Homeland Security Investigations division, developing custom threat-tracking tools and expanding the scope of data alerts to more effectively catch instances of organized retail crime.
“Despite our efforts, unfortunately, we continue to face fundamental challenges to operating these stores safely and successfully,” Target said.
Target said it also launched an Outreach Coordinator Program in 2021 to connect “guests experiencing hardship to community resources,” resulting in 5,700 guest interactions across 11 markets, nearly 100 trainings and more than 135 events.
The retailer also said it is working with government officials, law makers and law enforcement on a variety of initiatives, including adding its support to legislation combatting the sale of stolen goods, advocating for the creation of a federal organized retail crime task force, creating organized retail crime task forces at the state and local level, and hosting store walk-throughs will members of Congress, state legislators, city officials, law enforcement and others.
“We’re working hard both inside our stores and with government and community partners to achieve lower loss rates over time, and our long-run expectation is that shrink rates will moderate from today’s unsustainable levels,” CFO Michael Fiddelke told analysts in August. “But so far, we’ve only seen indications that loss rates might soon be reaching a plateau but have not yet seen evidence that loss rates will begin to come down.”
Shrink accounted for $112.1 billion in losses in 2022, up from $93.9 billion the previous year, according to the 2023 National Retail Security Survey, released Tuesday by the National Retail Federation (NRF).
The average shrink rate in fiscal year 2022 increased to 1.6%, up from 1.4% the year before, the survey found. And 67% of survey respondents said they were seeing more violence and aggression from organized retail crime perpetrators compared to a year ago.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” NRF VP for Asset Protection and Retail Operations David Johnston said in a statement. “Far beyond the financial impact of these crimes, the violence and concerns over safety continue to be the priority for all retailers, regardless of size or category.”
Target said all eligible employees of closed stores will be able to transfer to other locations.
In May, Target closed four underperforming stores in Minneapolis; Philadelphia; College Park, Maryland; and Falls Church, Virginia.
Target ended the most-recent quarter with 1,955 locations.