A major US drugstore chain that supposedly saw an uptick in shoplifting last year — fanning the flames of conservative anger over an alleged rise in crime and disorder — said Thursday it may have exaggerated the problem.
Walgreens’ chief financial officer, James Kehoe, said during an earnings call that “deflation” — the difference between balance sheet inventory and actual inventory — has returned to lower levels after a brief rally. The decline of the retail business is largely due to theft, although some is also due to accidental damage or loss.
“We probably cried a lot last year when we reached numbers of 3.5% of sales,” Kehoe said. Earnings call text. “We’re down at the bottom of, call it, the 2.5 average, 2.6 sort of range right now.”
Conservative politicians and commentators have them summoned An alleged shoplifting spree, part of an effort to paint reform-minded Democratic officials and prosecutors as Soft on crime.
Walgreens added fuel to the fire last year when it said it was Close Many of its stores in San Francisco due to unstoppable “retail theft” despite security investments. The company has hired private security in some stores and at least one outlet has placed ice cream under lock and key.
Kehoe admitted on Thursday that those methods were excessive.
“We put in additional safety in stores in the first quarter, in fact, we may have put in too much, and we may have pulled back a little bit on that,” he said.
The chain, part of Walgreens shoes The alliance will shift more toward relying on law enforcement rather than private security firms, as “security firms have proven to be largely ineffective,” Kehoe said.
Other retailers have recently stuck with their claim that theft of some kind is on the rise. Wal-Mart claimed it was grappling with an increase in shoplifting, and warned of consequences such as increased costs and potential store closures.
“Theft is a problem. It’s higher than it’s been historically,” company CEO Doug McMillon said. he told CNBC. However, McMillon said this stemmed largely from “organized retail theft” rather than a one-off theft.
While shoplifting may not have hurt Walgreens’ profits as much as it once thought, the company said it posted a loss of $3.7 billion in its first quarter, due in part to litigation over the US opioid epidemic, which has claimed lives. Hundreds of thousands of Americans in the past decade. Walgreens reached an opioid-related settlement with state and local governments last quarter to pay $5.7 billion over 15 years.
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