Shopkeepers Are Frustrated With the Crime Rate
Shopkeepers across America are frustrated at the crime wave that’s gripped the country, especially in San Francisco. These retailers claim that the increased level of theft has become dire, threatening their livelihood.
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The outcry has forced the National Retail Federation to crack down on the case, trying to find a solution to this unfortunate situation.
Everyone's Affected, Even Big Brands
Typically, news of theft affecting a business’s performance usually revolves around small establishments. However, the alleged crime wave has affected everyone, even some of America’s biggest brands.
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Companies like Target, Walmart, and Walgreens have closed their retail locations, citing the increased crime rate as the culprit. Target was mainly affected by this issue, closing nine stores across five cities.
"These Claims Are Exaggerated…"
Naturally, both big and small stores closing will lead to a nationwide investigation, and the results are fascinating. According to William Blair, crime exists in America, but that’s not the primary reason for this issue.
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William Blair is a global financial service specializing in investment banks. It has recently made a research note, which mentions that while crimes have risen to noteworthy levels, “…That’s not the only thing happening.”
Who Is William Blair?
William Blair isn’t a person but an American multinational independent investment bank and financial services company. They focus on investment banking, investment management, and private wealth management.
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William McCormick Blair founded the firm in 1935, and has its headquarters in Chicago, Illinois. The company has over 20 offices worldwide and has around $123 billion of assets as of December 2020.
What's Going On?
In the report, William Blair suggests that other factors, such as the pandemic, work shortage, e-commerce, the migration of high earners, and the worker shortage, affect retailers’ decisions to shut down stores in some urban areas.
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Essentially, William Blair questions the credibility of the retailers’ claims and considers the possibility of hidden agendas behind their actions.
Target Lied About Crime Rates
William Blair uses Target as an example, pointing out that the company closed nine stores after releasing a statement. It reads “We cannot continue operating these stores because… organized retail crime is threatening the safety of our team…and contributing to unsustainable business performance.”
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However, statistics showed that crime rates in the closed Target stores were lower than in other open shops.
The Actual Reason Stores Are Closing
Since Target’s reason for closing its stores doesn’t correlate with the facts, William Blair proposes another possibility. The financial company claims that Target is using crime rates as an excuse to close unprofitable stores.
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Essentially, instead of owning up to their bad management and business decisions, they’re blaming a nonexistent culprit. One poor business decision made is setting up a small-format store downtown instead of investing in online shopping as it’s rapidly replacing brick-and-mortar shopping.
Fortunately, Not All Stores Are Dishonest
While Target blamed crime for closing nine retail stores, other companies are coming clean to the media. Walgreens chief financial officer, James Kehoe, admitted that “maybe we cried too much last year [about theft].”
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This statement referenced the store’s 2021 fears, blaming the rising crime for multiple closures. Walgreens’s initial comment contributed significantly to discussions about corruption in the city, leading to William Blair’s research.
William Blair Doesn't Dismiss the Idea That Shoplifting Contributed to Stores Failing
Although William Blair has called out these establishments for blaming the crime rate for their store’s closure, he doesn’t dismiss the claim entirely. Essentially, he acknowledged that the increased shoplifting and other malicious activities continue to affect small and large businesses.
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The company further states, “We see limited if any, near-term fixes to the larger problem of organized retail theft.” In other words, William Blair understands that there are no easy fixes to shoplifting, especially in organized groups.
Retailers Are Making Much Noise About Theft to Spur a Government Crackdown
William Blair claimed that retailers blamed crime to cover their poor management; however, the bank suggests an additional reason. They assume retailers complain about the crime rate to stimulate a government crackdown.
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For now, complete government intervention is tricky since the “…only thing the government could do would be to go after organized retail crimes”, according to the bank. While this approach will likely be a slow journey, it’ll effectively curb the crime rate.
The Bottom Line
San Francisco is undoubtedly riddled with criminal activities as retail outlets get ransacked by shoplifters in organized groups. However, an investigation conducted by William Blair revealed that the stores closed due to crime had lower criminal activities than the stores left open.
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While William Blair concludes that these retailers lie to cover their poor management, the bank suggests that the noise was an outcry for government intervention.