TARGET’S chief financial officer has spoken out on the company’s war on shoplifting, warning of “significant financial headwind” to come.
Michael Fiddelke was among top bosses in an earnings call on Wednesday who admitted Target‘s theft problem, known as “shrink”, sees no end in sight.
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“We think progress there probably doesn’t happen quickly,” the CFO told The Wall Street Journal on the call.
The inventory “shrink”, which is the loss of product due to factors such as employee theft, and shoplifting, continues to be a “significant financial headwind.”
“We’re focused on progress over time,” Fiddelke said. “It’s not one that we’d expect overnight.”
“Growth in shrink remains a significant financial headwind and we’re determined to continue making progress in the years ahead,” he continued.
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However, the company said shrink in the most recent quarter was “smaller than expected” and “better than we faced earlier in the year.”
Target said its comparable sales dropped 4.9% versus a year ago, although its stock surged 17% after it delivered higher-than-expected profits for the third quarter, up 36% per share.
The store also reported a 6% increase in customers checking out with a cashier versus self-check-out, chief operating officer John Mulligan said on the call.
In a statement from Target corporate this September, they said that they would be shutting nine stores across four states, effective October 21.
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“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” Target told customers.
They laid out their efforts to combat theft and retail crime in stores as well.
Target, like Walmart, has decided to lock up their most frequently stolen goods.
There have been mixed reactions to preventative theft measures such as locked shelves at stores.
On Wednesday, Target’s CEO Brian Cornell spoke to CNBC about what he was hearing from customers.
“Actually what we hear from the guests is a big thank you, because we are in stock with the brands that they need when they’re shopping in our stores,” he said.
“And because we’ve invested in team member labor in those aisles and make sure we’re there to greet that guest, open up those cases, and provide them the items they’re looking for.”
https://www.the-sun.com/news/9638645/target-anti-theft-measures-self-check-out-theft-crime/