Walgreens Executives Say Drugstore Chain Loses About 50% More Money Due To Losses And Theft Than Before 2020 | Top stories

Walgreens Executives Say Drugstore Chain Loses About 50% More Money Due To Losses And Theft Than Before 2020

| Local News | Local News

Customers walk past products locked in safety cabinets at a Walgreens store in San Francisco, California.Photo by Justin Sullivan / Getty Images

  • Walgreens’ shrinkage rate, or items lost due to theft and damage, is 40-50% higher than it was before 2020.

  • “These are gangs that come in and empty our beauty stores,” said the company’s chief financial officer.

  • Retailers lost a record $ 61 billion to theft in 2020, according to a National Retail Federation survey.

Walgreens lost more revenue to theft and damaged items in 2021 than in 2020 and “absorbs a 52% increase in shrinkage.”

That’s according to Walgreens Boots Alliance CFO James Kehoe. In a Jan. 6 call with investors, Kehoe said Walgreens’ shrinkage rate, or inventory loss attributed to theft, fraud and damage, is currently around 3.25%. The company’s shrinkage rate was just over 2% 10 years ago, he added.

Kehoe said organized crime played a role in the 40-50% reduction “over the past two years.”

“It’s not a petty theft,” he said in a phone call with investors on Jan.6. “It’s not someone who can’t afford to eat tomorrow. It’s gangs coming in and emptying our beauty stores. And that’s a real problem.”

Walgreens reported net income from continuing operations of $ 2 billion for the 12 months ending August 31. With an unknown shrinkage rate of 3.25%, the company could have lost $ 65 million of its bottom line last year due to the theft.

According to the National Retail Federation, U.S. retailers lost about 1.62% of their revenue due to the contraction in 2020, to a record $ 61.7 billion.

Retailers said the growth of third-party e-commerce stores has exacerbated retail crime. Two retail spokespersons told Insider’s Áine Cain that anonymous online merchants can make it easier for thieves to market their loot without attracting suspicion.

Twenty retailers, including Target, Best Buy and Kroger, have called on Congress to pass legislation to tackle illegal business activities by anonymous online sellers.

“Not only does the retailer have the merchandise stolen, someone is competing with them online by selling the same product for half the price because it’s stolen,” Scott Glenn, vice president, told Insider protection of the assets of Home Depot. “So this is really hitting retailers from many directions. “

Some have questioned whether retailers are being honest about the extent of retail theft.

FBI crime statistics have shown burglaries, thefts and thefts to reach all-time highs in 2020. The San Francisco Chronicle found that San Francisco police data did not support Walgreens’ explanation, according to Walgreens. which he closed five stores due to an organized retail theft. Stores scheduled to close have had “less than two recorded shoplifting incidents per month on average since 2018,” according to the report.

Correction: A previous version of this story attributed statements by Walgreens CFO James Kehoe to Walgreens CEO Roz Brewer.

Read the original article on Business Insider

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