Target says it's closing 9 stores due to theft. The crime data tells a different story.~~ REBECCA CROSBY, JUDD LEGUM, AND TESNIM ZEKERIA OCT 5

 

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On September 26, Target announced it was closing nine stores "because theft and organized retail crime are…contributing to unsustainable business performance." Target said that before making the decision to close stores, it "invested heavily in strategies to prevent and stop theft and organized retail crime." But ultimately, the company asserted, those efforts were not enough to make those stores "successful."  Target's press release resulted in an avalanche of coverage in virtually every major media outlet.  The overall tone of this coverage — with a few exceptions — was credulous. Many stories do little more than summarize Target's announcement. Others contextualized Target's store closures as the result of a larger crime wave. "The big box chain is part of a wave of retailers – both large and small – that say they’re struggling to contain store crimes that have hurt their bottom lines," CNN reported. "Many have closed stores or made changes to merchandise and layouts." Notably, CNN did not indicate when this "wave" of store closures started nor indicate how it determined that more stores than usual are closing.  There are certainly other factors that could contribute to closing a handful of Target's stores. In June, Target CEO Brian Cornell said the company was saddled with large quantities of unwanted merchandise that it was forced to deeply discount, cutting into profit margins. Moreover, Target's stores include "many fun and impulse-driven items," but that merchandising mix "has become a liability as consumers focus on needs rather than wants and put discretionary dollars toward vacations and concerts," CNBC reported in August. Groceries only account for 20% of Target's sales, compared to 50% at competitors like Walmart. One thing that is missing from all the stories is data that would substantiate Target's contention that these stores closed due to theft. Target did not include any specifics on the level of theft at the closing stores or how that compares to stores that will remain open. Popular Information contacted Target for that information but did not receive a response.  Popular Information analyzed publicly available crime data for the stores Target is closing in New York and San Francisco. This data reveals that stores that are being closed have lower levels of theft than nearby stores that have remained open. An analysis of the stores Target is shuttering in the Seattle area follows a similar pattern. This data suggests that factors other than crime are driving Target's decisions.  The truth about crime at Target in Harlem One of the stores Target is closing due to claims of increased crime is located in New York City in a shopping plaza in the East Harlem area. An analysis by Popular Information, however, found that the area surrounding the plaza at 517 East 117th Street has had fewer incidents of shoplifting reported this year than other Target locations in Upper Manhattan.  New York Police Department complaint data, which includes “valid felony, misdemeanor, and violation crimes reported to the New York City Police Department,” found that the approximately one-block area that includes Target and a few other retailers had 201 reported incidents of shoplifting in the first six months of 2023. This analysis includes incidents of petit larceny from a store, grand larceny from a store, and robberies that began as shoplifting. Comparatively, the one-block area around the Target located at 150 East 86th Street had 327 reported incidents of shoplifting in the same period. In the first six months of 2023, the area around the 795 Columbus Avenue store had 232 reports of shoplifting. While crime data doesn't capture all incidents of theft, as some go unreported, it does provide a reliable way to measure relative levels of theft among stores.  According to Gothamist, Target also plans to open another location in Harlem at 125th Street and Lenox Avenue, which is “just 1.5 miles from the location it plans to close at the East River Plaza.” The company is additionally planning to open multiple new locations in New York City, including stores in Chelsea, Astoria, Union Square, Brooklyn, and the Bronx.  The truth about crime at Target in downtown San Francisco Target is also closing one store in San Francisco, located at 1690 Folsom Street. A Popular Information analysis of the San Francisco Police Department’s incident reports, which are filed by officers or members of the public, found that in the approximately two-block radius surrounding the Folsom Street location, there were fewer incidents of shoplifting reported than in the same size radius around at least three stores in downtown San Francisco that will remain open. In the two-block radius around the closing Folsom Street location, there were 23 reports of shoplifting filed this year, compared to 385 reports in the area around the Mission Street store, 155 reports in the area around the Winston Drive location, and 48 reports in the area around the Geary Boulevard location. The data included reports of shoplifting, shoplifting with force used, thefts from buildings, robberies of a chain store, and robberies committed in a street or public place. Target is also closing one store in Oakland, California, but there are no other Target stores located in the downtown Oakland area to compare. Further, the company is closing a store in Pittsburg, California, but Popular Information was not able to identify reliable data for that store. The truth about crime at Target in Seattle  A report from the Seattle Times found a similar pattern in Target stores located in the Seattle area. Target is closing its stores in the University District, which had 87 police reports filed this year, and Ballard, which had 41 police reports. Meanwhile, Target will continue to operate nearby stores with more or similar levels of police activity, including in Northgate (172 police reports), downtown (68), and West Seattle (76). Both stores that are closing "went unmentioned in [a] July examination of organized shoplifting in the city." The Seattle Times noted that the stores that are closing "are relatively new, opening in 2019 as part of a push by Target to shore up its bottom line by opening smaller, more profitable stores in urban areas."  Target is also closing three stores in downtown Portland, Oregon, but Popular Information was not able to identify reliable crime data for these stores. Understanding "shrink" In September, the National Retail Federation (NRF), a trade association that represents Target and other major retailers, said that retail theft “continue[s] to impact the retail industry at unprecedented levels.” The timing of Target’s press release announcing the closure of nine stores occurred on the same day that the NRF released its annual Retail Security Survey. In 2022, according to the survey, “shrink” — an industry term for inventory losses from theft, damage, or administrative errors — was 1.57% of total retail sales, up from 1.44% in 2021. This means that an average of $1.57 in inventory was lost for every $100 in sales. The shrink rate in 2022, the NRF reports, is the same as it was in 2020 and 2019. Over the last seven years, shrink has oscillated between 1.3% and 1.6%. Experts note that “the share is largely in line with past years and is considered a normal and healthy level of shrink.” In addition, “when retail sales go up, as they did in 2022, shrink also tends to rise,” the Los Angeles Times reports. Retailers, according to the New York Times, are more likely to talk about shrink “during times of economic distress…when their profits are already being squeezed.”  Moreover, external theft is not the largest cause of shrink — other sources like “process, control failures, and errors” and “employee theft” account for a majority of the loss. Companies may be overemphasizing crime to deflect from internal issues. Retailers, for instance, “have struggled to properly staff stores over the last few years,” one expert told CNBC. "The lack of sufficient staffing remains a major contributor to shrink, as shrink monitoring technologies are only effective insofar as they flag risk," UBS analysts wrote in a note. "It's necessary to follow up with human intervention."