Thursday, July 25

Retail group retracts surprising claim about ‘organised’ shoplifting.

A national lobbying group has withdrawn its startling estimate that “organized retail crime” was responsible for nearly half of the $94.5 billion in merchandise missing from stores in 2021, a figure it helped amplify. claims that the United States was experiencing a nationwide shoplifting surge.

The group, the National Retail Federation, changed that statement last week from a widely cited report published in April, after trade publication Retail Dive revealed that faulty data had been used to arrive at the inaccurate figures.

The retraction comes as retail chains like Target continue to claim they are victims of large shoplifting operations that have cut into profits, forcing them to close stores or inconvenience customers by blocking products.

The claims were fueled by widely shared videos of some cases of brazen shoplifters, including images of masked groups smashing windows and grabbing luxury bags and cellphones. But the data shows that this impression of rampant crime was a mirage.

In fact, according to police data, shoplifting has been lower this year in most parts of the country than it was a few years ago. There are some exceptions, including New York City. But in most large cities, shoplifting incidents have fallen 7% since 2019.

Organized retail crime, in which multiple individuals steal products from multiple stores and then resell them on the black market, is a real phenomenon, said Trevor Wagener, chief economist at the Computer & Communications Industry Association, who has conducted research on the sales data retail. But he said organized groups were likely responsible for about 5% of the merchandise that disappeared from stores between 2016 and 2020.

He pointed out that there is “a lot of uncertainty and imprecision” in measuring losses, because it is difficult to distinguish what is shoplifting and what is organized crime.

Mr. Wagener testified to Congress in June about the discrepancy in the National Retail Federation report.

Although it withdrew the figure and revised the report, the federation, which has more than 17,000 member companies, insisted in an emailed statement that its attention to the issue was appropriate.

“We support the widely recognized fact that organized retail crime is a serious problem affecting retailers of all sizes and communities across our nation,” the statement read. “At the same time, we recognize the challenges that the retail sector and law enforcement face in collecting and analyzing an accurate and agreed upon set of data.”

At issue is “total annual shrinkage” – the industry term for the value of merchandise that disappears from stores without being paid for, due to theft, damage and inventory tracking errors.

Mary McGinty, a spokeswoman for the federation, said the error was caused by an analyst at K2 Integrity, a consultancy that helped write the report.

The analyst, who was not named, linked a 2021 National Retail Federation survey with a quote from Ben Dugan, former president of the advocacy group Coalition of Law Enforcement and Retail, who said in Senate testimony in 2021 that organized retail crime “is responsible for $45 billion in annual losses for retailers.”

Dugan cited the federation’s 2016 National Retail Security Survey, which actually referred to the overall cost of shrink in 2015, not the amount lost just to organized retail crime, Ms. McGinty said.

Alec Karakatsanis, a civil rights lawyer who has studied and criticized the way the media has covered organized retail crime, said the retraction highlights how some news outlets, which have extensively covered the shoplifting issue, have been “used as a tool by some vested interests”. raise a lot of fear about this issue when, in fact, it was pretty clear from the beginning that the facts didn’t add up.

One of the most notable examples occurred in October 2021, when Walgreens said it would close five stores in San Francisco, citing repeated cases of organized shoplifting. The company’s decision came months after a video viewed millions of times showed a man, holding a garbage bag, openly stealing products from a Walgreens while others watched.

But an October 2021 analysis by the San Francisco Chronicle showed that Police Department data on shoplifting doesn’t support Walgreen’s explanation for the store closures.

Walgreens ultimately backed away from its claims. In January, a company executive said Walgreens may have overestimated the effects on its business, saying, “Maybe we cried too much last year.”

Karakatsanis said the exaggerated narrative of widespread shoplifting has been weaponized by the retail industry, pressuring Congress to pass bills that would regulate online retailers, which they say is where much of the product ends up stolen.

Commentators and politicians have seized on the issue. Earlier this year, Gov. Gavin Newsom, Democrat of California, responded to reports of large-scale thefts in the state with a call to harshly prosecute shoplifters and a plan to invest millions of dollars to combat “organized thefts retail”. Gov. Ron DeSantis, Republican of Florida, signed a bill against shoplifting last year, and former President Donald J. Trump has called for violence, telling Republican activists in California this year that the police should shoot shoplifters as they leave a store.

Mr. Wagener, chief economist at the Computer & Communications Industry Association, said the National Retail Federation’s April report immediately struck him as wrong. The error was troubling, he said, because the federation has long been considered a reliable provider of data to the industry.

What made the federation’s mistake even more surprising, Wagener said, was the stark contrast between the figure and the same group’s previous results.

In 2020, the federation said in a report that organized retail crime costs retailers an average of $719,548 per $1 billion in sales, a number nowhere near the roughly 50% claim made in the report. April.

Another survey by the National Retail Federation showed that all off-site thefts – including thefts not related to organized retail crime – accounted for 37% of shrinkage, a figure that would still be billions of dollars lower than the incorrect estimate of the 50% done in April.

“It would be a bit like the census saying that almost half of the American population lives in the state of Rhode Island,” Wagener said.