Target’s successful closures could spark a tidal wave of shutdowns as biggest US chains still battle theft, experts warn

AFTER shutting the doors of several stores to combat theft, Target has seen a huge rise in sales nationwide, potentially leading to more closures across retailers.

Retail experts are now warning that the positive impact of Target’s store closures may cause other large stores like TJ Maxx and Marshalls to follow suit.

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Over the last year, Target shoppers have seen several stores close in major cities, including ​​Seattle, Washington , New York City, New York , San Francisco, California , and Portland, Oregon .

At the time, the retailer to rising retail crime that has been plaguing small and large businesses nationwide.

Target said theft and organized retail crime had put its shoppers and employees at risk.

“Before making this decision, we invested heavily in strategies to prevent and stop theft and organized retail crime in our stores, such as adding more security team members, using third-party guard services, and implementing theft-deterrent tools across our business,” the company said.

“Despite our efforts, unfortunately, we continue to face fundamental challenges to operating these stores safely and successfully.”

While the closures may have caused concerns, the company does not appear to have suffered.

This week, Target saw its shares rise 11% in premarket trading, according to the New York Post .

Target also said it expects its overall 2024 profit to range between $9.00 and $9.70 per share.

Previously, Target expected a range of between $8.60 and $9.60.

Target COO Michael Fiddelke reportedly cited lower “inventory shrinks”—also known as losses incurred by theft or shoplifting—as one reason for this positive surge.

As these numbers are a positive sign for the company, experts have said it could spark other retailers to follow suit.

Burt Flickinger III, the managing director of Strategic Resource Group, told Marketwatch that the store closure success “could be a big harbinger.”

Some experts have reportedly already heard of some retailers making moves.

Patric McCall, the president and CFO of McCall Risk Group, told the New York Post that companies owned by TJX Brands—including TJ Maxx, Marshalls, and HomeGoods—are considering closing some stores in Chicago, Illinois.

Anti-theft measures rolled out by retailers

Retailers across the US and Canada have rolled out strategies designed to combat theft. The U.S. Sun has compiled a list of measures that have been implemented at stores.

• Locking items in cabinets.
• Security pegs.
• Security cameras.
• Signs warning about the impact of theft.
• Receipt scanners.
• Receipt checks.
• Carts with locking technology

“It also becomes a customer service issue because a lot of these retailers are short-staffed to begin with and now do not have the manpower to have additional employees on the sales floor to open up these cabinets or displays every time a customer needs a product,” McCall said.

Others have also warned that the closures could cause “retail deserts” in areas with high crime rates.

As stores consider closing, some political leaders have sought to take action to protect retail employees and shoppers.

Earlier this month, California Governor Gavin Newsom signed 10 bills into law looking to crack down on theft and shoplifting.

Target's anti-theft measures

Target has implemented multiple anti-theft measures to combat crime in the store.

The retail giant has placed some items behind locked cases , which has resulted in customer backlash.

In April 2024, reports surfaced that it is planning to add TruScan cameras to its self-checkout registers.

Target also added weight sensors to its self-checkout registers in another move to combat theft.

DEFENDING PRICES

At the same time, major retailers like Target have sought to defend their business practices as Democratic presidential candidate Kamala Harris has blasted “corporate price-gouging in the food and grocery industries.”

If elected president, Harris has vowed to implement a ban on price-gouging that she claims is stoking inflation of groceries and household goods .

Amid the accusations, Target CEO Brian Cornell said retailers don’t have room to price-gouge as they can also go and find cheaper goods elsewhere.

“We’re in a penny business,” Cornell told CNBC .