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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."

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