'This isn't a random shoplifter anymore': Home Depot CEO warns retail theft is a 'big problem' as the chain bolsters security, even on small items. What's behind the alarming trend?
Retail giants have always had to deal with petty theft, but a growing trend of organized retail crime is now not just eating into company profits, it’s threatening the safety of workers.
“It’s a big problem for retail,” Home Depot (NYSE:HD) CEO Ted Decker told CNBC’s Squawk Box. “This isn’t the random shoplifter anymore.”
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The home improvement retailer has faced the loss of two employees — Gary Rasor, 83, and Blake Mohs, 26 — who were killed during separate theft incidents over the past year.
In August, a Florida pastor was arrested and accused of operating a multimillion-dollar theft ring stealing from numerous Home Depot locations in the state.
Organized retail crime and theft are growing in both scope and complexity across the country, according to a study from the National Retail Federation (NRF) — to the extent that former Home Depot CEO Bob Nardelli recently described it as an “epidemic … spreading faster than COVID.”
In its 2022 security report, the NRF estimated retail theft is costing the industry about $100 billion.
What’s behind this alarming trend?
Theft at Home Depot stores has been “growing double-digit year over year,” the retailer’s VP of asset protection, Scott Glenn, recently told ABC News.
“More and more we’re seeing the risk being brought into the stores, and people being hurt or people even being killed in many cases because these folks, they just don’t care about the consequence,” Glenn said.
Home Depot isn’t alone in experiencing an uptick in organized retail crime, which the National Retail Federation defines as the large-scale theft of retail merchandise with the intent to resell the items for financial gain.
About 70% of retailers believe the threat of organized retail crime has increased over the past five years, according to the 2022 National Retail Security Survey.
To reduce the risk of theft and other crimes in its stores, Home Depot has started locking up high-value items, some of which Decker says may surprise customers.
“They’re not all big — they’re not all power tools and generators. You can have a circuit breaker — [worth] $50, $60, $80 — those are all high-theft items.”
When asked if Home Depot would have to shutter certain stores — following the footsteps of other retail giants — the CEO says the retailer has so far managed to avoid that.
However, Decker says the company is increasingly concerned over the safety of their employees and customers. As a result, they’ve invested more in security guards, more lighting in their parking lots and recording towers.
“It’s not a place in retail that many of us thought we would be,” he said.
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Avoiding stolen goods online
When it comes to organized retail crime, “a lot of this product is [re-sold] on online marketplaces,” Decker said.
To counter this, the retail giant has been working with local, state and federal governments to help them understand the problem and come up with a viable solution.
Late last year, Congress passed the INFORM Consumers Act. The act requires online marketplaces to collect, verify and disclose certain financial and identifying information from “high-volume third-party sellers” — those with more than 200 transactions and $5,000 in revenue in a 12-month period.
INFORM Consumers, which took effect June 27, aims to increase the transparency of online transactions, while also deterring criminals from using online marketplaces to sell stolen, counterfeit or unsafe items.
Decker said he’s “super happy” the bill passed as “it’s going to make those marketplaces vet their sellers.”
In the meantime, the big-name retailer must continue “to manage” its theft challenges and cope with the “pressure on [its] gross margin,” the CEO added.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
