The upsurge in organized retail theft will shutter storefronts and further increase costs for consumers already struggling with high inflation, economists at the Heritage Foundation have said.
“If businesses can’t raise their costs to cover the cost of the flight, if they don’t make a profit, then they’re going to shut down,” said Andrew Puzder, former CEO of CKE Restaurants and visiting scholar. at Heritage, told Fox News.
In 2021, “retraction” or retail theft cost the industry $94.5 billion in losses, up 4% year-over-year and nearly double the 50, $6 billion in 2018, according to data from the National Retail Federation. The report shows that cases of organized retail crime rings – where thieves are hired to steal specific items to resell online – have risen more than 26% from the previous year.
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“You have this incredible expense that really comes from a lack of policing,” Puzder told Fox News.
“You saw these groups coming. They destroy everything,” he continued. “They break everything and steal what they can.”
Target expects to lose more than $600 million in gross profit by the end of the year due to reduced shoplifting, the company’s chief financial officer, Michael Fiddelke, said at a press conference. an earnings call earlier this month.
“This is an industry-wide problem that is often driven by criminal networks, and we are working with multiple stakeholders to find industry-wide solutions,” Fiddelke said. .
Puzder blamed the rise in crime on soft-on-crime policies of progressives like how New York and California raised the threshold so theft under $1,000 or $950, respectively, wouldn’t be a misdemeanor rather than a felony.
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“We can’t sacrifice law and order and have a safe and civil society to try to achieve nirvana-type social goals that really produce chaos and increase costs for business,” he said. .
Puzder said that puts businesses, which are already raising prices to keep up with inflation, in a difficult position. US inflation eased slightly last month, with the October consumer price index posting a 7.7% increase from a year ago and 0.4% from the previous month, according to the Bureau of Labor Statistics.
“Companies can only raise costs so much before people can’t go,” said Puzder, whose former company owns restaurants like Carl’s Jr. and Hardee’s. “If you are increasing to deal with high inflation, can you also increase to cover the cost of those flights? »
Stores in cities with soft-on-crime policies are left with two options: raise prices further to cover the cost of theft or close locations that are struggling to turn a profit, said Joel Griffith, a researcher at the heritage and former member of The Wall Street. Journal editorial board.
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“Companies have to make up for that loss somehow,” Griffith told Fox News.
He said the hit to business results also had “a very real impact on you as a consumer”.
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For businesses to survive, consumers will either have to pay a tax on theft or lose accessibility to goods and services due to shutdowns, according to Griffith. And residents of low-income areas, which are experiencing rising crime rates, will bear the brunt of the fallout from organized retail theft, he added.
“It’s unfair,” he said. “It makes living in these low-income communities even less desirable.”
To watch the full interview on organized crime in retail, click here.
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