Macy's, Dick's, and Lowe's are sounding alarms on US shoppers

[lightbright]

A shift in consumer spending is challenging retailers that sell discretionary merchandise like apparel and home goods.

• Macy's said US consumers have less cash to spend, and are choosing experiences over products.
• Lowe's said homeowners are doing well, but fewer are taking on projects themselves.
• Dick's meanwhile reported an unexpected uptick in inventory shrink from retail theft.

American households continue to dial back spending on non-essential products as their cash reserves dwindle and credit card balances rise.

The shift presents a challenge to retailers that sell discretionary merchandise like apparel and home goods.

Macy's, Dick's Sporting Goods, and Lowe's each sounded alarm bells on Tuesday about the financial state of US shoppers, with each company reporting softening profit margins in key categories.

Even with high prices and rising interest rates, US consumers are certainly still spending lots of money, but they're also getting more selective about where they spend it.

Macy's said its shoppers are under mounting financial pressure and their credit card balances are rising. Many are opting to spend on experiences, rather than products, and they are bracing for the return of student loan payments, Macy's CEO Jeff Gennette told CNBC.

Total company sales for the quarter fell 8% compared to the same period last year, and profits dropped due to markdowns and promotions that helped clear spring inventories.

Lowe's — like rival Home Depot last week — is seeing weaker demand from its DIY shoppers after a burst of home spending during the pandemic. Rising interest rates and falling lumber prices aren't helping.

Even so, both home improvement companies said pro shoppers are helping keep sales steady, and that homeowners are still benefitting from increased home values.

Dick's, meanwhile, reported a 23% quarterly drop profits compared to the same period last year, which it blamed on an unexpected uptick in inventory shrink due to theft.

"The number of incidents and the organized retail crime impact came in significantly higher than we anticipated," Dick's CFO Navdeep Gupta told analysts on the earnings call, warning of elevated levels through the remainder of the year.

In prepared remarks, Dick's CEO Lauren Hobart called shrink "an increasingly serious issue impacting many retailers."

Last week, Target CEO Brian Cornell said Target stores have seen theft incidents with violence or threats of violence more than double in the first half of this year, and that shrink remains on track to cost the company $1.2 billion in 2023, a $500 million increase over last year.

The big winner in this week of earnings remains Walmart, which has benefitted significantly from continued spending on essentials like groceries.

"Customers are stretching their dollars further and seeking better value across more categories, more often," Walmart CFO John David Rainey said in a call with analysts last week.

MSN

 

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How Costco is winning the war against rising retail theft​

Costco says "strictly controlling the entrances and exits and using a membership format" help it curb retail theft.

ANALYSIS

• Walmart, Target, and other major retailers are sounding alarms about rising losses due to theft.
• Costco's CFO says the wholesale club has been fortunate to avoid the wider industry trend.
• Here's how Costco's model helps it win against shoplifting.

Get the inside scoop on today’s biggest stories in business, from Wall Street to Silicon Valley — delivered daily.

Walmart, Target, Dollar Tree, and other major retailers have warned of rising theft rates plaguing stores across the US.

But one company appears to be immune to the problem: Costco.

The warehouse chain's chief financial officer, Richard Galanti, said Thursday that shrinkage — or inventory losses due to theft, fraud, or other causes — was largely unchanged.

"We haven't seen any major change in shrinkage," Galanti said in an earnings call. "We've been fortunate in that regard."
Galanti said the company saw a slight increase after the rollout of self-checkout three years ago, but those rates have since reverted to the longer-term trend.

Target, meanwhile, has said its losses from shrinkage will balloon to more than $1 billion in 2023, up $500 million over last year. Walmart's CEO said in December that stores would close if theft didn't slow. Dollar Tree said this week that it was considering locking up more goods in stores as it faces rising shrink.

Overall, theft helps drive about $95 billion in losses every year for US retailers, according to estimates by the National Retail Federation, an industry group.

So what is Costco doing right? Here's four strategies that likely deter theft in its stores.

Costco collects personal data on its shoppers​

Costco requires a membership to shop there. To sign up, shoppers must pay an annual fee and provide their photo, home address, and other identifying data.

Shoppers are likely less inclined to steal when a store has this level of personal details about them.

Stores block shoppers from entering without a membership​

Costco is strict about its membership rules. Shoppers must scan their membership cards to complete purchases, and also display them to enter stores.

Employees stationed at the entrance of every store check the cards to ensure a paid member is with any group of shoppers entering.

"By strictly controlling the entrances and exits and using a membership format, we believe our inventory losses (shrinkage) are well below those of typical retail operations," Costco says in its annual report each year.

Costco requires shoppers to show their receipts at checkout​

Employees are also stationed at store exits to check that receipts match up to the items in shoppers' carts. Every receipt and cart is checked.

A Costco receipt has a lot more information than meets the untrained eye, employees previously told Insider. There's a code showing that the receipt was printed that day; a total count of items sold; supervisors' initials on big-ticket purchases; and codes to check for large products like paper towels or cases of water.

Bigger items are harder to steal​

A common strategy for organized retail crime rings is the "push-out," in which a thief rolls a cart full of stolen merchandise to a vehicle waiting outside. But Costco's store layout and receipt checks (and lines to leave the store) make that approach a lot harder to pull off.

And although bulky items like laundry detergent and personal care supplies are popular targets of organized retail crime rings, stealing one or two at a time isn't as profitable if the goal is to resell the merchandise online.

Even small, expensive items that could typically fit in a pocket or be hidden in a cart is generally displayed and sold in weirdly oversized packaging that is too big to be easily concealed.

In short, Costco is better able than most retailers to control its losses to retail theft thanks to some key strategies that are core to its business.

How Costco is winning the war against rising retail theft

Retailers like Walmart and Target have raised alarms about losses due to shoplifting. But Costco appears largely immune to the trend.

www.businessinsider.com

 

[tallblacknyc]

I knew Costco of all stores would be like problems what problems

 

[lightbright]

I knew Costco of all stores would be like problems what problems

From the gitgo..... did they ever have a problem like that? Even if you ever did make it out with something valuable, you'd never..... get out of the parking lot with all the fucking traffic in them


.

 

[Dr. Truth]

Costco be having the best damn snacks and fruit too. All the fruit be sweet as fuck and it’s organic. They got good meat too. I like those USDA Prime steaks. They like butter damn near low quality Waygu but if you want A5 Japanese Waygu they got that shit too!!!!!! And it’s mad cheap compared to a damn steak house

 

[gene cisco]

I knew Costco of all stores would be like problems what problems

Yeah, Sams club is like that too.

Meanwhile, we got grocery stores up here getting wrecked. Profit margins must be shit.

 

[flx2000]

Costco full of shit
You can enter the store through the exit because that’s where the food is at.
You can go there for lunch and get good pizza at a cheap price with a drink.

What’s stopping you from going further into the store.

You also have to enter the store and head over to the registration area to get a card.

I guess the idea of being checked at the door upon entering is enough to make people go elsewhere for crime.

 

[Ceenote]

• Macy's said US consumers have less cash to spend, and are choosing experiences over products.
• Lowe's said homeowners are doing well, but fewer are taking on projects themselves.
• Dick's meanwhile reported an unexpected uptick in inventory shrink from retail theft.

Macys..aint nobody fucking with them
Lowes higher than home depot and menards..u do the math
Dicks...just aint nobody fucking with u right now..aint that much theft..and let's say it is, than that means thefts has been heavy for u guys!! Yall just aint addressing it...I guess they gonna start having security in them stores now...

 

[Ceenote]

Costco full of shit
You can enter the store through the exit because that’s where the food is at.
You can go there for lunch and get good pizza at a cheap price with a drink

Check this out... maybe so, but bottom line it aint effecting the business in a negative way...ijs

 

[tallblacknyc]

Costco full of shit
You can enter the store through the exit because that’s where the food is at.
You can go there for lunch and get good pizza at a cheap price with a drink.

What’s stopping you from going further into the store.

You also have to enter the store and head over to the registration area to get a card.

I guess the idea of being checked at the door upon entering is enough to make people go elsewhere for crime.

To much work for a theft squad.. 30 individuals all at the sametime gonna go hey let’s go to the food area? Naw.. than when mysteriously they all pass by the registers they got to know the layout ( which gets switch all the time) to certain products than grabbed them and run pass them long ass lines or through self checkout than pass by the nigs who check your receipt at the door , than run out the spot to parking lot or whatever..to much work than grab what’s near the door , etc

 

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Target Plans to Implement Major Changes Due to Increase in Shoplifting Incidents 'Enough is Enough!'​

Many large-scale businesses have identified shoplifting as their primary source of financial troubles, and Target has joined in.

Target CEO, Brian Cornell, predicted that organized retail crime would cause a $500 million increase in lost and stolen goods. This will bring a total loss or shrink to over $1 billion.

Retail Shrink​

The colossal amount Brian allocated to retail shrink is a good reason to act against shoplifting. Apart from shoplifting, retail shrink includes damaged goods, internal theft, goods lost during distribution, goods sold for the wrong prices, and many other issues.
In 2021, Target had a total retail shrink of about $400 million, which increased by $336 million in 2022. By Brian’s prediction, in 2023, the loss would amount to a staggering amount of $2.4 billion; however, the amount assigned to shoplifting would be hard to estimate.

Huge Losses​

In line with the National Retail Federation, retailers lost $94.5 billion in 2021, and 37% of that loss was due to external retail crime. Judging by that ratio, for Target, less than $900 million would be attributed to external theft.
Brian has, however, ascertained that shoplifting is the primary cause of Target’s retail shrink. Back in 2021, executives at Walgreens made the same claim. Still, the Chief Financial Officer later admitted that the company had overspent on security measures and that shoplifting was not necessarily the cause of their retail shrink.

True or False Narrative​

Due to their recent financial issues, Target may be pushing the shoplifting narrative to divert attention from its administration. We can’t know for sure if the blame on shoplifting is the truth or exaggerated, but we know the retail corporation is taking precautions against theft in not just a few but in all its locations in the United States.
Brian Cornell said the company has started putting protective equipment in some stores.

Preventive Measures​

The locations with the highest theft rates have the most of these preventive measures. The most constantly stolen goods are also being removed from those areas.
Brian also mentioned that the company is trying to work with policymakers, law enforcement agencies, and industry trade associations to examine political solutions to the problem. However, unlike how Walgreens tackled its issue in 2021, Target is not closing down any stores, not even the ones where the most problems occur.

MSN

 

[Princenubian]

A shift in consumer spending is challenging retailers that sell discretionary merchandise like apparel and home goods.

• Macy's said US consumers have less cash to spend, and are choosing experiences over products.
• Lowe's said homeowners are doing well, but fewer are taking on projects themselves.
• Dick's meanwhile reported an unexpected uptick in inventory shrink from retail theft.

American households continue to dial back spending on non-essential products as their cash reserves dwindle and credit card balances rise.

The shift presents a challenge to retailers that sell discretionary merchandise like apparel and home goods.

Macy's, Dick's Sporting Goods, and Lowe's each sounded alarm bells on Tuesday about the financial state of US shoppers, with each company reporting softening profit margins in key categories.

Even with high prices and rising interest rates, US consumers are certainly still spending lots of money, but they're also getting more selective about where they spend it.

Macy's said its shoppers are under mounting financial pressure and their credit card balances are rising. Many are opting to spend on experiences, rather than products, and they are bracing for the return of student loan payments, Macy's CEO Jeff Gennette told CNBC.

Total company sales for the quarter fell 8% compared to the same period last year, and profits dropped due to markdowns and promotions that helped clear spring inventories.

Lowe's — like rival Home Depot last week — is seeing weaker demand from its DIY shoppers after a burst of home spending during the pandemic. Rising interest rates and falling lumber prices aren't helping.

Even so, both home improvement companies said pro shoppers are helping keep sales steady, and that homeowners are still benefitting from increased home values.

Dick's, meanwhile, reported a 23% quarterly drop profits compared to the same period last year, which it blamed on an unexpected uptick in inventory shrink due to theft.

"The number of incidents and the organized retail crime impact came in significantly higher than we anticipated," Dick's CFO Navdeep Gupta told analysts on the earnings call, warning of elevated levels through the remainder of the year.

In prepared remarks, Dick's CEO Lauren Hobart called shrink "an increasingly serious issue impacting many retailers."

Last week, Target CEO Brian Cornell said Target stores have seen theft incidents with violence or threats of violence more than double in the first half of this year, and that shrink remains on track to cost the company $1.2 billion in 2023, a $500 million increase over last year.

The big winner in this week of earnings remains Walmart, which has benefitted significantly from continued spending on essentials like groceries.

"Customers are stretching their dollars further and seeking better value across more categories, more often," Walmart CFO John David Rainey said in a call with analysts last week.

MSN

^^**subbity dub dub dubbed**^^

Carry on…….