Thefts at Target have turn out to be increasingly violent and dangerous for staffers, the retail giant’s CEO told investors on Wednesday.
Shoplifting that included “violence of threats of violence” surged 120% through the first five months of the yr, said Brian Cornell, chief executive of the Minneapolis-based big-box chain.
“Our team continues to face an unacceptable amount of retail theft and arranged retail crime,” Cornell said through the company’s second-quarter earnings call. “Unfortunately, safety incidents related to theft are moving within the mistaken direction.”
Cornell said that Target’s inventory shrink — which accounts for retail theft and other losses of merchandise — is “well-above the sustainable level where we expect to operate over time.”
The National Retail Federation, the nation’s largest retail trade group, said its latest security survey of roughly 60 retailers found shrink clocked in at a median rate of 1.4% last yr, representing $94.5 billion in losses.
The best portion of shrink — 37% — got here from external theft, including products taken during organized shoplifting incidents, the trade group said.
It also noted retailers, on average, saw a 26.5% uptick in organized theft incidents last yr.
Target reported its first quarterly sales drop in six years — contributed partly by the calls to boycott the brand over the LGBTQ-friendly merchandise.
Profit for the fiscal second quarter got here in above expectations, nonetheless, as Target brought inventories closer in step with cautious spending on discretionary items by customers.
Cornell also addressed the threats to staffers within the wake of the controversy surrounding the sale of LGBTQ-related merchandise during Pride Month.
In May, customers knocked down Pride displays at some stores, angrily approached employees and posted threatening videos on social media from contained in the stores.
The backlash, which included calls to boycott the corporate over its sale of “tuck-friendly” bathing suits, prompted Target to remove some items from its store and even relocate the merchandise to the rear of the locations.
“We denounce violence and hate of every kind, and safety of our team and our guests is our top priority,” Cornell told investors during Wednesday’s earnings call.
Despite the losses, Target will still be celebrating Pride Month in 2024, Cornell said, noting that future collections will give attention to being “celebratory and joyous, with wide-ranging relevance.”
Target may even be “mindful of timing, placement and presentation” of its future Pride collections, Cornell added.
“Pride is one among many heritage moments which might be vital to our guests and our team, and we’ll proceed to support these moments in the long run.”
Target’s CFO Michael Fiddelke addressed Target’s disastrous rainbow-clad collection in an earnings call on Wednesday, saying: “Traffic and top line trends were affected by the response to our Pride assortment.”
Cornell said higher high prices for food and household essentials are taking a much bigger chunk out of the paychecks of consumers, who’ve also pulled back on buying some goods in favor of travel or spending outing of the home in other ways.
“Guests are out at live shows,” Cornell told reporters on a media call Tuesday.
“They’re going to movies. They’ve seen ‘Barbie.’ They’re having fun with those experiential moments, they usually’re shopping very fastidiously for discretionary goods.”
Target earned $835 million, or $1.80 per share, within the quarter that ended July 29. That compares with $183 million, or 39 cent per share, within the year-ago period.
Sales fell nearly 5% to $24.77 billion as shoppers focused more on groceries than discretionary items.
Additional Reporting by Shannon Thaler and Post Wires