Walmart, Target: thefts increasing, could cause price increases

Walmart CEO Doug McMillon went on CNBC’s Squawk Box Dec. 6, discussing issues with theft and how the company could have to respond to it. 

McMillon said theft is “higher than it has historically been,” and that it varies from location to location. The company normally works with local law enforcement to deal with it. 

“We’ve got safety measures, security measures, that we’ve put in place by store location,” he said. “I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it.” 

Target Corp. also said it is seeing higher incidences of theft – 50% higher – though CFO Michael Fiddelke said much of it is from organized crime. Fiddelke said during the company’s third quarter earnings call on Nov. 16, theft is expected to reduce the company’s gross margin by more than $600 million this year. 

McMillon said the company wants to see more enforcement from authorities. 

“If that’s not corrected over time, prices will be higher, and/or stores will close,” McMillon said. 

Walmart is one retailer that has implemented widespread self-checkout stations in stores, which are often targets, with thieves using systems to scan lower price items in place of higher ticket merchandise. 

Fraud in self-checkout and self-scanning applications has pushed some retailers to discontinue the service, including Rochester, NY-based Wegmans. Wegmans cited shoplifting as a primary reason the company discontinued the SCAN app, which allowed customers to skip the checkout lane when shopping.