UPDATE: The truth about Target

On September 26, Target announced it was closing nine stores “because theft and organized retail crime are…contributing to unsustainable business performance.” Target said that before making the decision to shutter the stores, it had “invested heavily in strategies to prevent and stop theft and organized retail crime.” But ultimately, Target claimed, those efforts failed to make those stores “successful.”

Target did not provide any data that substantiated the claim that it closed the stores due to theft. Nevertheless, the press release generated a flood of credulous media coverage from virtually every major outlet, sometimes contextualizing Target’s decision as part of a larger trend afflicting many retailers. “The big box chain is part of a wave of retailers – both large and small – that say they’re struggling to contain store crimes that have hurt their bottom lines,” CNN reported. “Many have closed stores or made changes to merchandise and layouts.”

On October 5, Popular Information analyzed publicly available crime data for the stores Target is closing in New York and San Francisco. This data revealed that stores that are being closed had lower levels of theft than nearby stores that have remained open. A report by the Seattle Times of the stores Target is shuttering in the Seattle area follows a similar pattern.

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Further, William Blair states it “believe[s] some more recent permanent store closures enacted under the cover of shrink relate to underperformance of these locations.” The report raises questions about Target’s store closures specifically, citing Popular Information’s analysis, and suggests the company has “ulterior, more opportunistic motives.” Many of “the stores closed by Target are smaller format locations, a concept the company started rolling out more in 2018.” The report notes that “after making a big push into smaller format, Target has not discussed the initiative since 2020.” According to the report, Target may be blaming increases in theft to “mask other issues.” Walmart, the report notes, closed four smaller stores in Chicago in April 2023 and “did not blame crime or theft and rather acknowledged strategies like downsizing it (sic) footprint…underperformed expectations.”

R&I ~ MJM