We're in the phase of "Build Back Better" where companies are planning for hundreds of millions in growing losses each year.
Target announced Wednesday that it expects to lose an ADDITIONAL $500 million in 2023 compared to 2022.
CEO Brian Cornell called out the challenge on the company's fiscal first-quarter earnings call, saying the retailer and others are grappling with rising theft on top of slower sales and more price-sensitive shoppers. He described retail theft as "a worsening trend that emerged last year," and said violent incidents have increased at Target's stores.
"The problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm's way," he said on the call.
This isn't a small jump in inventory loss, either.
The company reported $763 million in such losses last year, meaning a $500 million jump would put it above $1.2 BILLION, or a 65% increase.
Organized retail crime has become a hot-button issue in the industry, and some companies have blamed the growth of online marketplaces that allow thieves to anonymously sell electronics, makeup and other items they stole from stores. Home Depot, Walmart, Best Buy, Walgreens and CVS are among the major retailers that have spoken about the problem, saying that shrink has gotten worse.
"The country has a retail theft problem," Home Depot CFO Richard McPhail said on a call with CNBC on Tuesday. "We're confident in our ability to mitigate and blunt that pressure, but that pressure certainly exists out there."
You do understand that Target is a for-profit company and it must pass those losses onto customers in order to stay solvent, right?
If they are planning hundreds of millions in new losses each year, how long can they continue until they are forced to increase prices beyond what customers are willing to pay?
You inner-city Marxists, do you see why stores like Walmart and Whole Foods are fleeing your neighborhoods? You have no right to a national retail store in your neighborhood. Most people in history have had to grow their own food. If you want to be a developed nation with nice things like big-box stores, you need to quickly rediscover law and order.
Chief Financial Officer Michael Fiddelke said on the company's investor call Wednesday that shrink reduced the company's gross margin rate in the fiscal first quarter by a full percentage point compared with a year ago.
Cornell said Target is trying to reduce theft by installing protective fixtures and adjusting assortment in some stores. He said the company is working with politicians, law enforcement and retail industry trade groups to come up with policy solutions.
What I want to see is a breakdown from Target on the stores losing the most money. I'd bet about 80% of it would be wiped out by closing the stores in "progressive" San Francisco, LA, Chicago, and New York. Go to Twitter and type in "shoplifter Target" and you'll have hours of entertainment!
But hey, if the commies don't change their tune and keep using race and sex to divide people for their new Marxist revolution, at least we'll have yet another historical example of how communism leads to misery and starvation when all the stores pull out of their cities!
