Rising Shoplifting Rates and Inflation Spark Controversy at Walmart and Across the US
The increasing rates of shoplifting in the United States, coupled with rising inflation, have created contentious encounters between shoppers and employees at Walmart and other retailers nationwide. As a response to the surge in theft, Walmart, the largest retailer in the country, has implemented enhanced anti-theft technology at its self-checkout counters. However, this approach has led to a rise in tense interactions between hourly workers and customers, according to a recent report by Business Insider.
When the anti-theft technology detects an unscanned item, a light is triggered, and an alert is sent to nearby employees via text message. Walmart has trained its workers to approach customers and attempt to resolve the issue, but they are explicitly prohibited from accusing anyone of theft, as stated by current and former Walmart employees who spoke to Insider.
Dozens of national retailers have reported significant increases in shoplifting incidents or organized retail crime. According to the 2023 National Retail Security Survey released by the National Retail Federation (NRF), theft, or shrink, accounted for $112.1 billion in losses in 2022, up from $93.9 billion in 2021, making up a significant percentage of total retail sales.
One factor contributing to the thefts is the persistently high inflation rate. The Consumer Price Index by the US Bureau of Labor Statistics (BLS) registered a 3.7 percent increase for the 12 months ending in September, the same as the previous month. Though the pace of increase has slowed compared to 2022, when it peaked at around 9 percent, the incremental price hikes are still adding to the overall inflated costs.
Food prices have also seen notable increases, with a 0.2 percent climb in September marking the third consecutive month of upward movement. The perceptions of consumers, however, differ greatly from government data. According to a study by data consulting company Dunnhumby, which surveyed over 8,000 grocery shoppers nationwide, consumers perceived a 22.6 percent inflation rate for food consumed at home as of April, significantly higher than the BLS-estimated rate of 7.1 percent for the same period.
The combination of higher prices and heightened theft has created a volatile situation in many American stores. David Johnson, the Vice President of Asset Protection and Retail Operations at the NRF, wrote that retailers are facing unprecedented levels of theft alongside rampant crime, making safety concerns a top priority for all retailers, irrespective of their size or industry category.
Walmart’s Chief Financial Officer, John Rainey, noted in an earnings call in December that the stores with the highest shrink rates were located in areas with the lowest prosecution rates for shoplifting. Actual encounters between employees and customers can sometimes turn volatile, as described by Walmart employees who have been subjected to abusive behavior when confronting customers at self-checkout.
Despite the implementation of advanced technology, the element of surprise catches many customers off guard when alerted by the machines. Customers often react defensively or confusedly when approached by Walmart employees, who have been instructed to handle the situation by taking the item away and suggesting that the machine may not have scanned it properly. However, these employees report not having received any training on de-escalation tactics.
Walmart spokesperson Joe Pennington stated that the company, like many other retailers, continually seeks improved ways to tackle theft, including the enhancement of technology at checkout counters.
Food-price inflation fluctuates depending on the item, with some experiencing substantial increases and others witnessing significant declines. Frozen fruits and vegetables, sugar, beef and veal, bread, and ice cream have all seen notable price hikes, while eggs, butter, cheese, lettuce, chicken, milk, pork, fish, and seafood have experienced declines.
The US Department of Agriculture’s Food Price Outlook report predicts that while food prices are expected to grow more slowly in 2023 compared to 2022, they will still remain above historical-average rates, with an estimated overall increase of 5.8 percent.
In conclusion, the combination of rising shoplifting rates, driven in part by inflated prices, has created a challenging environment for retailers across the US. Walmart’s implementation of enhanced anti-theft technology has resulted in heightened confrontations between employees and customers. While retailers continue to grapple with theft and crime, there is a pressing need for increased safety measures and strategies to address the contentious encounters that arise in these circumstances.
