The Law Enforcement and Retail Alliance, a trade association, estimates that organized retail crime results in approximately $45 billion in losses to retailers each year. More than $500 billion in stolen and counterfeit goods are sold illegally on third-party platforms such as Amazon (AMZN).
Retail robbery is soaring across the U.S., with huge chains like Best Buy (BBY) and Walgreens (WBA) assailed by progressively brazen and far reaching occurrences of shoplifting that is harming their base lines. In ongoing weeks, reports of “smash and grab” burglaries in significant cities — featuring crowds of criminals making it off with hardware, dress and footwear — have overflowed social media. Security specialists refer to a reiteration of reasons including aftermath from the COVID-19 pandemic, overpowered law enforcement, and deteriorating public safety. In San Francisco specifically, particular kinds of burglary have been everything except decriminalized, with officials facing accusations of being too lax on crime.
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“What we’re seeing is kind of a perfect storm,” Ben Duggan, president of the alliance, told Yahoo Finance Live this week. Duggan said the coalition is pushing for federal legislation to regulate online marketplaces, “so that people don’t hide in the shadows of the internet and operate anonymously.”
He also noted the influence of organized crime networks that use petty thieves to further their activities.
“They are already being recruited by criminal organizations that engage in so-called ‘organised retail crime’, [which] Since 2017, with most of the online market expanding.”
“Unfortunately, I don’t think some of these young people really understand the amount of problems they’re in, they really get involved with the criminal organizations that recruit them and convince them there won’t be any consequences,” Duggan said.
A flurry of smash-and grab robberies has plagued California in recent weeks, with most of the incidents happening in stores near San Francisco and Los Angeles. In Lakewood, a group of eight to nine young men stole an estimated $400 worth of tools including sledgehammers and crowbars that could be used for future crimes, according to the Los Angeles County Sheriff’s Department.
In October, Walgreens sparked a firestorm by announcing it would shutter several locations in San Francisco because of a surge in what it called “organized retail theft.” And shares of Best Buy have been under pressure after the company announced a tepid sales forecast this holiday season.
In a conference call last week, the company stunned investors by pointing to organized thefts as partly responsible for a drop in the company’s gross profit margin in the third quarter. “We are seeing more and more particularly organized retail crime,” Chief Executive Officer Corie Barry said on a call with analysts. “You can see that pressure in our financials, and more importantly, frankly, you can see that pressure with our associates. It’s traumatizing.”
And tragically, the wave of violence has led to at least one fatality. Over the weekend, Kevin Nishita, a retired police officer, was shot and killed while protecting a San Francisco Bay Area TV news crew covering the rash of organized retail crime in the region. Dugan explained that in most cases, criminal organizations provide their recruits with rental cars, escape routes and burglary tools or allow them to use their own weapons.
“They plan these events with these young folks, with the understanding that there’s a high propensity for violence and they have no regard for human life or for the consequences,” Dugan said. Police in Los Angeles have arrested four people in connection with the flash mob burglary at Home Depot (HD) in Lakewood. However, oftentimes thieves face few consequences.
Theft and petty theft charging rates have dropped in the Bay Area, according to data analysis found by the San Francisco Chronicle. The crime wave has put intense political pressure on District Attorney Chesa Boudin, a progressive ex-public defender who is now facing a recall effort. Boudin indicated that the drop in charging rates is due to the reduced operation of the city’s court system caused by pandemic restrictions. However, theft charges increased between 2020 and 2021 as the city reopened.
He also announced nine people have been charged with felonies in a series of shoplifting incidents that included a mass smash-and-grab at Union Square’s luxury stores recently. A group of at least 40 people were allegedly involved in those incidents. There’s a lot of different victims in this crime, it’s not just the stores. People are getting physically assaulted. It’s a tremendous burden on employees that are traumatized by this event.
Ben Dugan, Coalition for Law Enforcement and Retail
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