Not one word on theft by high school and college students. It is way out of whack.
Our children as a society are stealing everything in sight. It is not just about inner city people. Not half of it is inner city people.
Thing is in white communities the retail execs expect today’s young thieves to be working in the company and consuming the product legitimately paying for the goods one day. So not a word on them stealing corporations blind.
This is a brutal report $2.80 instead of $3.81 eps because of shrinkage.
Our bushy tailed kids are hard at work.
Are we sure it’s theft? Is management using theft as a convenient scapegoat to cover up a shortcoming by management?
What? Management lie? In Shiny-land?
/sarcasm
Steve
I think it is theft. All of them are proving very high percentages of shrinkage.
The same kids stealing are aiming for the C suite.
The “clinker” suite: Barred door, someone else has the keys, they either eat in a cafeteria-style room or meals are brought to them by the guard, AND they get one hour per day for exercise.
They do mention self-checkout, which has to be at least part of the problem. About the third time something won’t scan I get a bit tempted to just drop it in the bag myself (although I actually have just left it sitting by the register at least once). The absence of staff assistance on the floor probably makes theft tempting, also.
I kind of doubt whether it’s teenagers ripping off Home Depot.
A few things occur to me from reading these stories.
ONE – While some of these merchants are reporting big drops in gross margins, I’m AMAZED by how high those gross margins (still) are. A thirty four percent gross margin selling a mix of golf clubs (which I would expect to be MUCH higher margins) and golf polos and golf balls? One would think “efficient markets” would have squeezed those margins far lower.
TWO – It would be FASCINATING to chart these loss figures across these major retailers on the same page as online sales through “Amazon affiliates.” I would bet there is probably an 85% correlation between retail thefts and online sales of name brand goods from sellers you’ve never heard of who are selling at 10-20% lower than expected retail prices. I suspect Amazon’s online “marketplace” has turned into the world’s most poorly disguised fencing operation.
I’ve seen ads for firms that claim to be selling “bespoke” gift baskets each month. For a monthly subscription, the “merchant” sends you a random collection of stuff (clothes, costume jewelry, weird doo dads) and you keep what you want and send the rest back. Hmmm. So a large volume of stuff being returned and being “specially packaged just for you” sets the expectation for none of it arriving in the original sealed packaging. They can keep recycling returned stuff while seamlessly mixing in new stuff from origins unknown…
There’s no way someone organizing a smash and grab at Macy’s or Nordstrom can use 35 handbags or 20 designer dresses of random sizes yanked off the rack. The loot is clearly being fenced and resold. It can’t be that much of a mystery to track down how and stop it. And by definition, this IS organized crime meriting a great degree of focus.
Oh well. I’m sure Corporate America can solve this without any interference from local or federal government. Just keep cutting taxes, let the money trickle to the top and the CEOs will form their own private police force to roam the aisles of Target, Dicks and Lowes, guarding the underwear, golf clubs and DeWalt drills.
WTH
RS needed to average a 40% GP to break even. The little stuff, like the small parts on the peg boards in the back of the store, were 80% GP.
Best Buy, who, I read, makes a profit with a 19% GP, needed a few decades to wipe out RS. That market wasn’t all that efficient?
Steve
The kicker none of these chains are losing a cent because of this. They pass it onto everyone else.
You might as well somewhat see it as Dicks’ would have made $2.75 but making up the shrinkage and a vig put it at $3.81 a figure they never got.
OTOH without marking it up for shrinkage they would have made around $1.75 if they just ate it.
So the dollar of shrinkage is real.
The chains just need to say it to the public somehow when reporting.
As far as this being used as an excuse the books are reported quarterly. If they mess with the books more than that it is fraud.
As far as what the goods are ie Home Depot? Or others? Everyone needs everything eventually. Our suburban kids simply take it all. They are being trained to work in these stores with orders not to interfere with shoplifters.
Don’t forget that employers are engaged in theft too.
Anyone working for minimum wage which is the largest group of workers. Yes minimum wage is different in different states. Still as a group the largest group of workers.
Anyone working for minimum wage the employers are lacking in credibility. The employers are users instead of taking care of business.
The theft part of it is huge as well. Just the next step for a user.
Do you have a link for that? This graph shows the share of hourly workers by state that are at or below the minimum wage. it ranges from 0.3% to 3.2%
https://www.bls.gov/opub/reports/minimum-wage/2022/home.htm
In 2022, 78.7 million workers age 16 and older in the United States were paid at hourly rates, representing 55.6 percent of all wage and salary workers. Among those paid by the hour, 141,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 882,000 workers had wages below the federal minimum. Together, these 1.0 million workers with wages at or below the federal minimum made up 1.3 percent of all hourly paid workers, little changed from 2021.
DB2
@DrBob2 worthless chart using $7.25 the federal min wage. Many states have higher min wages that still are not living wages.
From your link
In 2021, around 3.2 percent of hourly wage workers in Louisiana made at or below the federal minimum wage. This was the highest share followed by the District of Columbia with 2.5 percent of hourly wage workers making minimum wage or below.
What percentage of Americans make $15 or less?
Roughly one-third of the U.S. workforce—52 million people—earn less than $15 an hour, according to a new report from anti-poverty advocacy group Oxfam America.Mar 22, 2022
I do fully agree on both sides of this the term Minimum Wage is very loosely used. You do though fully know what I meant.
No. That honor goes to eBay. Amazon comes in second. They still keep some thin veneer of respectability and honesty. eBay abandoned that veneer years ago.
–Peter
Be interesting for the FBI to match of IP addresses with zip codes and profiles of the sellers. You’d find fenced goods by a ton of white males. It would dwarf expectations.
This is a major cultural shift. The kids do a stint or two in retail and are trained to be totally hands off do not bother the ship lifters, let it go.
The cultural blame game on the inner city was always shifting it off of white high school kids. When I was in a local hardware store in the mid 1980s that was true. Now it is just take what you want among the students.
I doubt that. To be a seller on Amazon you have to open up a seller account. That requires a credit card that can be charged internationally, a government photo ID, and other things that “smash and grab” participants don’t or won’t bother with.
eBay, by contrast, lets people sell multiple items any way you want: (preloaded) credit card, PayPal, Venmo, check, etc and no real identification of either party is necessary; you transact everything with a screen name.
Amazon may be many things, but I don’t think “on line fence” is one of them. The easier avenues are Facebook Marketplace, Craigslist, eBay, and other online apps like NextDoor, etc.
Actually even Walmart takes part in this. Local managers can buy things and sell them in the stores. That is a much slower trickle. Walmart is not doing much of this but it happens.
Amazon merchants can do it all day long. Yeah they are ID’ed etc by Amazon but after that what they sell is more up to them.