By: Hellen Zaboulani
Rite Aid, the drug store chain, cited shoplifting as a major impediment, while reporting its revenue shortcomings.
As reported by the NY Post, on Thursday, Rite Aid reported disappointing quarterly results, which were worse than expected. Rite Aid CEO Heyward Donigan proceeded to tell analysts that the company “experienced unexpected headwinds this quarter from front-end shrink, particularly in our New York urban stores.” Donigan added that the company will be “shrinking our footprint” in New York City, with plans in progress to close dozens of less-profitable stores throughout the Big Apple.
Rite aid said it suffered from a $5 million year-over-year increase in “shrink” – which is a retail industry term referring to losses related to theft, fraud or administrative errors. In other words, the company said there were $5 million more thefts this year, which took a bite out of the company’s profits. Rite Aid’s chief retail officer Andre Persaud named the NYC-area for the expansive losses from shoplifting, saying the situation had deteriorated despite the retailer’s efforts to improve “product protection.”
“I think the headline here is the environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city,” Persaud said. He highlighted the retailers’ efforts to stop the shoplifting, saying they may put all inventory in locked displays in neighborhoods where theft has grown, and may also explore pharmacy-only store formats. “We’re looking at literally putting everything behind showcases to ensure the product’s there for customers who want to buy it,” Persaud added. “And then lastly, we’ve even had to go to the extent of using off-duty police officers in some of our stores, just into some of these communities also.”
The drug store chain currently operates close to 2,300 locations across the country, with 318 stores in the state of New York. The website lists 27 Manhattan locations, 34 Brooklyn stores, and 18 Bronx stores. “(We’re) seeing a higher level of brazen shoplifting and organized retail crime, and we are taking an active role in helping the police in their pursuit of shoplifters,” a Rite Aid spokesperson told The Post on Friday. “Our organized retail crime team has partnered with local police precincts on approaches to mitigate this criminal activity and help make arrests and is actively working with multiple District Attorneys’ offices throughout New York City to address recidivist theft issues,” the spokesperson added.
The Rite Aid at the corner of Eighth Avenue and 50th Street in Hell’s Kitchen had over $200,000 in merchandise stolen in just a two-month period, per the Post. The store has already been shuttered by the company in February. “They come in every day, sometimes twice a day, with laundry bags and just load up on stuff,” one Rite Aid employee told The Post. Critics have put the blame on District Attorney Alvin Bragg for soft on crime policies including the infamous bail reform law.
Other big chain retailers with stores in NYC have also complained about the increase in shoplifting. Home Depot, Best Buy, and Wegmans have similarly reported a rise in theft at stores, and have introduced measures to mitigate losses, including locking merchandise, upping security and in some cases scrapping self-checkout. Recent NYPD data shows a 42 percent jump in petty larceny incidents this year, compared to 2021. Robberies are up over 37%, and burglaries have increased more than 32%.
