Skip to main content

Target says that a contributing factor to a drop in profitability is "organized crime," which it claims has contributed to a $400 million loss this year.

During its 3rd quarter earnings call on Wednesday, chief financial officer Michael Fiddelke addressed Target's inventory shortages – also known as "shrink." Per Shopify, shrinkage in retail describes when a company has fewer items in stock than its recorded inventory states, with possible reasons including theft, shoplifting, administrative errors, vendor fraud, or product damage.

Fiddelke told analysts that said shrinkage "has already reduced our gross margin by more than $400 million versus last year," and says he expects that to grow by $600 million by the end of the year.

When asked for more details, COO John Mulligan said that this inventory shortage is part of a "nationwide problem" that requires collaboration with other affected retailers.

He then goes on to add: "And this is primarily driven by organized crime."

Retail thefts were particularly in the headline last holiday season, when a number of retail stores across the country were the subject of "flash mob" thefts that saw large groups of thieves descend on a store at the same time, outnumbering store security and grabbing what they can before fleeing.

But Mulligan's comments suggest a more chronic, ongoing problem that has resulted in it implementing a number of "remediation" measures in its stores.

These can be seen notably at the Target store on Nicollet Mall in downtown Minneapolis, where regular theft has left to a number of products being placed behind locked glass doors, including toothpaste and other toiletries.

"It's obviously not something we like to do. It's far less convenient for guests as they shop our stores, but we think we can manage that from a service perspective," Mulligan said.

"And you can see us continue to do that as we see stores that are more impacted. We'll continue to provide additional remediation factors. The biggest focus for us is keeping our team and our guests safe. And so, we start there."

Next Up

https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/2022/11/SOLWHDPSSI%20FILINGS.pdf

Company agrees to changes after child workers found in MN meat plants

An investigation found children ages 13-17 working hazardous jobs at the plants.

soda-g7792ca8e9_1280

Drinks can company to lay off almost 100 workers, close St. Paul plant

State authorities were informed of the impending closure.

MinceyMug

Suspect in Minneapolis bar killing charged with weapons crime

The suspect has not been charged with murder in the case as of Wednesday.

snow, blowing snow

A monster storm is coming next week: What will happen?

What we know with high confidence at this point is that there will be a monster storm in the central U.S. by the early and middle part of next week.

police lights

Boy safe after kidnapping by non-custodial parent in Mankato

The search prompted the temporary shutdown of I-35 Tuesday night.

Mugshots

11 face charges after being found 'exploring' Fridley sewer system

A 911 caller reported seeing a group removing a manhole cover Monday night.

image

Man killed by St. Paul police ID'd by family, community demands answers

The man was identified as 24-year-old Howard Johnson.

Screen Shot 2022-12-07 at 7.38.02 AM

Quick shot of snow to impact morning commute in Twin Cities

Snow is moving into the metro Wednesday morning.

ambulance

Body found in burned out car near Bird Island identified as local farmer

The deceased is a 59-year-old man from rural Bird Island.

Screen Shot 2022-12-06 at 2.47.44 PM

Minneapolis' Khâluna named in Eater's 2022 'Best New Restaurants'

The restaurant, opened in 2021, is known for its Laotian cuisine.

Related

best buy

Best Buy considering added security to counter organized retail crime

CEO Corie Barry addressed the issue during a Q3 earnings call.

New-Store-Design_Exterior

Target reveals its next strategy: Build bigger stores

The retailer plans to increase the floorspace at its new stores.

Brooklyn Park Target

5 girls arrested for Target shoplifting, crashing stolen car

Police say the girls also hit someone in the parking lot.

target

Target profits plunge as it takes hit from shedding excess goods

The retailer announced earlier this year it would be slashing prices.

Cabela's

7 children arrested after 'disturbance' at Cabela's, escape in stolen vehicle

Employees called police saying the children were stealing goods from the store.

Screen Shot 2022-03-16 at 10.00.55 AM

Galleria Edina shopping mall sells for $150 million

The upmarket, 400,000-square-foot mall has been sold to a local investor group.