The retail landscape today is often painted with a stark, unsettling brush: shelves emptied by brazen thieves, once-bustling stores shuttered, and a collective sigh of exasperation from executives grappling with what they describe as an unprecedented crisis. Indeed, the narrative of escalating retail theft, driven primarily by organized retail crime, has become a dominant storyline, with dozens of retailers signaling to investors that inventory shrink is taking a significant bite out out of their profits. The numbers are staggering, a chilling testament to the scale of the problem. Major U.S. retailers collectively lost a whopping $112 billion because of crime last year, according to a recent report from the National Retail Federation (NRF), with theft alone accounting for approximately 70% of merchandise shrinkage, translating to an estimated $78.4 billion lost to shoplifters in 2022.
This pervasive issue has not only eroded profits but has also forced some retail giants to make difficult, often drastic, decisions. Target, for instance, recently announced the closure of nine locations across the U.S., explicitly attributing these shutdowns to rising theft and crime, citing “unsustainable business performance.” Similarly, CVS revealed plans to close 10% of its stores, with rising cases of shoplifting noted as a contributing factor alongside a migration to online retail. Walmart also reportedly shuttered half of its Chicago locations in April, with CEO Doug McMillon having previously warned that persistent theft could lead to more closures and price increases. The sentiment from the top tiers of retail leadership is clear: the situation is dire. Tractor Supply CEO Hal Lawton, for example, remarked to Insider in August, “Organized retail crime is worse now than I’ve ever seen it.” Lowe’s CEO Marvin Ellison echoed this alarm, stating at the Goldman Sachs Retail Conference in September, “I’ve never seen anything like it.” Best Buy CEO Corie Barry also acknowledged her company is “definitely seeing an increase” in theft at certain stores. These are not isolated laments; they represent a widespread concern gripping the industry, with executives like Dick’s Sporting Goods CEO Lauren Hobart deeming the issue alarming, and Nordstrom CEO Erik Nordstrom attributing around one-third of his company’s loss to crime.
Yet, amidst this storm of retail woes, a fascinating counter-narrative has emerged, one that offers a glimmer of hope and a blueprint for resilience. Four major players—Costco, Lowe’s, Best Buy, and Tractor Supply—are not just surviving this turbulent environment; they are, in many respects, winning the battle against retail theft in a strikingly similar fashion. While their peers lament the rising tide of shrink, these companies stand as notable exceptions, their executives delivering statements that resonate with a quiet confidence. Costco CFO Richard Galanti, for instance, stated in May, “We haven’t seen any major change in shrinkage,” adding, “We’ve been fortunate in that regard.” This sentiment is not unique to Costco. Hal Lawton of Tractor Supply, despite his general industry observation, went on to reveal that shrink rates at Tractor Supply have actually “come down for two years running.” Marvin Ellison of Lowe’s and Corie Barry of Best Buy, while acknowledging the broader industry challenge, also convey a sense of control over the issue within their own organizations. It’s a remarkable divergence from the industry norm, suggesting that while the problem is real, it is not insurmountable. These companies, by managing to limit the effect of theft on their businesses, provide a compelling case study in strategic loss prevention.
This intriguing contrast compels a deeper look into the nature of retail theft itself and the data that purports to describe it. It’s a landscape often muddied by varying definitions and reporting methods, making a precise understanding challenging. Policymakers and business leaders frequently use terms like “shoplifting,” “organized retail theft,” and “shrink” interchangeably, yet they represent distinct concepts. Shoplifting typically refers to an individual instance of small-scale theft for personal gain. Organized retail crime, in contrast, is defined by the National Retail Federation (NRF) as coordinated, “professional” theft, usually involving multiple individuals, with the intent of reselling merchandise on the black market for financial gain. Both fall under the legal umbrella of larceny, graded by severity into petit and grand larceny. Crucially, “shrink” is a broader industry term for the value of merchandise that disappears from stores for *any* reason, encompassing not just external and employee theft, but also damage and inventory tracking mistakes. The NRF’s research indicates that while industry estimates put the value of shrink at around $100 billion annually, respondents to one frequently cited industry survey reported, on average, that only 36% of that loss stemmed from theft by customers. This distinction is vital, as equating shrink directly with retail theft can lead to an inflated perception of the problem solely driven by criminal activity.
Examining the available crime data, it becomes clear that the narrative of a national surge in retail theft is more nuanced than often portrayed. The most complete data set on national crime trends, published by the FBI, which includes all theft offenses under larceny, shows a decline nationally since 1990. More recently, larceny rates fell significantly in 2020 and 2021 before a rebound in 2022. However, taken together, the larceny rate in 2022 was still around 10 percent lower than in 2019. This overall national trend is further supported by city-level data collected by the Council on Criminal Justice, which, in a November 2023 report, found that the average shoplifting rate across a group of 24 cities had actually *declined* over the past few years, dropping from approximately 45 to 40 offenses per 100,000 people between January 2019 and June 2023. These figures somewhat undercut the idea of a universal national surge in the specific crime of shoplifting.
However, the national picture doesn’t tell the whole story, as significant spikes in shoplifting *have* been observed in certain localities. The Council on Criminal Justice’s report highlighted dramatic increases in New York, where shoplifting incidents reported to the police rose by 64 percent, and in Los Angeles, which saw a 61 percent increase between January 2019 and June 2023. Interestingly, contrary to some media accounts, reported incidents in San Francisco actually *declined* by 5 percent over the same period, even accounting for a large spike in 2021. Similarly, police data indicated that theft offenses in Washington, DC, including thefts from cars, fell from more than 25,000 in 2019 to roughly 21,000 in 2023. The reasons for these city-level discrepancies are not immediately clear, suggesting that local factors, some perhaps long-standing, may heavily influence retail theft trends more than national ones. In New York, shoplifting appears to have risen steadily since 2006, with a particularly large spike in 2022, reinforcing the idea of unique local dynamics at play. There are, however, some signs of progress in these hard-hit areas, with data through the end of 2023 suggesting a slowing in the increase of shoplifting offenses in Los Angeles and a potential decline in New York.
The interpretation of police and industry data on retail theft is fraught with challenges and caveats, further complicating a clear understanding of the problem. Police crime data, while our best guide, only reflects offenses reported or observed by law enforcement, and roughly three-quarters of all thefts go undocumented. Moreover, the classification of crimes can be fluid. A seemingly simple shoplifting incident might be documented as a robbery if violence is threatened or used, or as a burglary if it involves illegal entry with intent to commit a crime, such as in “smash-and-grab” thefts. This fluidity makes it difficult to precisely estimate the volume of crimes specifically against retail businesses. Adding to the complexity are changes in how theft is reported. A dramatic example occurred in September 2021 when a Target store in San Francisco reported 154 shoplifting incidents—ten times more than the previous month—due to a “new reporting system” that facilitated easier documentation with the police. This single change was so significant that it skewed citywide data, giving the impression that monthly shoplifting counts across San Francisco had doubled. While such sensational discrepancies are likely rare, smaller swings in data due to reporting method adjustments may be more common, subtly influencing perceptions of trends.
Industry figures, which could theoretically provide a complementary understanding, have also faced scrutiny and sometimes been mischaracterized. A significant issue lies in the unreliability of data concerning “organized retail theft.” Most statistics circulating on this specific type of crime originate not from law enforcement but from industry groups like the NRF and the Retail Industry Leaders Association (RILA). However, many of the figures offered by these organizations have proven to be imprecise or misleading. For instance, in April 2023, the NRF claimed that organized retail theft was responsible for nearly half of the $94.5 billion in store merchandise that disappeared in 2021. This claim, widely repeated and presented as hard evidence of a nationwide wave, was later retracted following an investigation. It turned out the NRF had mistakenly repackaged an earlier estimate of total retail shrink from 2015, which had nothing to do with organized retail theft. According to one review of NRF data, the impact of organized retail crime is “probably closer to” 5 percent of total shrink, and the NRF itself now “no longer releases financial costs specific” to this category, acknowledging reported losses are “lower than what the NRF expects them to be.”
Further adding to the data ambiguity, claims about the overall impact of theft by some retailers have not always panned out under closer examination. Walgreens, for example, initially cited spikes in shoplifting as an explanation for falling profits and store closures, but later retracted this claim. Target’s decision to shutter stores due to theft also faced scrutiny, with an analysis by researcher Jeff Asher indicating that, based on available data, the stores Target closed in Portland and Seattle had *less* crime than stores that remained open. CNBC reported in September 2023 that “certain retailers” have “pulled back” from blaming organized theft as “a primary cause of losses.” In fact, retail shrink, when viewed as a percentage of total sales, has held remarkably steady between 1.3 and 1.6 percent since roughly 2015, cutting against the idea of a recent national spike in retail theft from an industry perspective. Even post-pandemic declines in foot traffic in downtown areas could account for some store closures and losses erroneously attributed to theft.
The challenges in obtaining accurate, comprehensive data on retail theft, especially organized retail crime, underscore a critical need for greater clarity. The RILA’s report, which some pointed to for an annual value of organized retail theft at $69 billion, actually estimated the value of *all* retail theft at that figure, not just organized crime. Moreover, this study was based on data from just five Fortune 500 companies, a small and likely unrepresentative sample, prompting even the NRF to question its methodology. Similarly, NRF surveys, which report member experiences and perceptions, often suffer from extremely small sample sizes relative to the tens of thousands of retailers in the United States. For instance, in 2023, only 117 retailers responded to the survey, and in 2021 and 2022, the numbers were even smaller, with just 41 and 63 respondents respectively. Statistics generated from such limited samples may reflect more on who chose to respond than on overall sector trends.
Until more reliable and precise data on organized retail crime emerges, policymakers and law enforcement are left to navigate a complex, often misleading, informational landscape. Rushing into sweeping responses, such as lowering felony theft thresholds or instituting new penalties, without a clearer understanding of the data could lead to ineffective or even counterproductive outcomes. The mixed and nuanced evidence, particularly regarding the effects of such measures, demands a cautious and evidence-based approach. The true story of retail theft, therefore, is not simply one of escalating crime, but also one of fragmented data, definitional ambiguities, and the urgent necessity for rigorous analysis to separate myth from reality. In this intricate environment, the successes of Costco, Lowe’s, Best Buy, and Tractor Supply shine even brighter, not just as proof that the war can be won, but also as a call to understand the true nature of the battlefield.
While the broader retail industry grapples with a crisis of escalating theft and a murky data landscape, a select group of retailers—Costco, Lowe’s, Best Buy, and Tractor Supply—are not just weathering the storm; they’re actively winning the battle. Their success isn’t a stroke of luck but a testament to a meticulously crafted, multi-faceted strategic blueprint. These companies have adopted strikingly similar approaches that act as formidable defenses against shrinkage, offering invaluable lessons for an industry in flux. Their strategies, which we’ll unpack as five critical pillars, demonstrate that a proactive and intelligent approach can indeed mitigate the substantial risks posed by retail crime.
One of the foundational pillars of defense for these theft-resistant retailers lies in their judicious choice of store location and the deliberate design of their store layouts. With the notable exception of Best Buy, three of these successful chains—Costco, Lowe’s, and Tractor Supply—strategically position their stores in more suburban and rural areas. These locations inherently benefit from lower population densities, a factor that both Lowe’s CEO Marvin Ellison and Tractor Supply’s CEO Hal Lawton have explicitly cited as contributing to fewer incidents of theft compared to their busier, more urban counterparts. The reduced foot traffic and lower anonymity in these environments naturally act as a deterrent, making it more challenging for potential thieves to operate unnoticed.
Beyond mere geography, the architectural design and operational flow within these stores represent a significant anti-theft measure. Again, with the exception of Lowe’s, a remarkable commonality among three of these companies is a shrewd entrance and exit strategy. This design funnels every single shopper past attentive employees stationed at cash registers or security checkpoints. This isn’t just about convenience; it’s a deliberate control point. Costco, in particular, exemplifies this approach with its warehouse-style layout, featuring only a single point of entry and exit. This design choice, combined with its membership-based business model, forms a robust initial barrier. As Costco CFO Richard Galanti put it, “You have to show your picture ID when you come into our warehouse, so the fact that it’s member-only is a positive.” This enforced interaction and verification at the threshold significantly enhances security, differentiating it sharply from typical retail operations that might have multiple, less monitored entry points in bustling malls. Furthermore, Costco reinforces this control by having staff meticulously check receipts at the door as customers leave, ensuring that only paid-for items depart the premises.
The second powerful pillar in their defense strategy revolves around the sheer nature of the merchandise these retailers typically sell: it’s often big, bulky, and heavy. This characteristic transforms theft from a discreet act into a logistical challenge, making it exceedingly difficult for items to be conveniently stolen. Imagine attempting to inconspicuously abscond with a 96-pack of toilet paper from Costco, a large flat-screen television from Best Buy, a hefty lawn mower from Lowe’s, or a secure gun safe from Tractor Supply. Such items are simply too unwieldy to be concealed or quickly removed from a store without drawing significant attention.
Tractor Supply CEO Hal Lawton vividly illustrated this point, stating, “Most people aren’t able to walk in and throw a couple of those 50-pound bags over their shoulder and walk out.” He further noted that even if such an audacious attempt were successful, the financial gain for the thief would be relatively minor, amounting to only “$80 or $100.” This speaks to a strategic selection of inventory that naturally deters the common shoplifter. Costco takes this concept a step further by packaging ordinarily small, high-value items, such as Gillette razor blades, in curiously oversized flat packaging. This makes them significantly harder to conceal, turning a small, pocketable item into one that demands noticeable effort to hide, thereby reducing their appeal for opportunistic theft.
The third pillar involves employing highly secure display strategies for smaller, more valuable items, shifting from open accessibility to requiring customer assistance. These retailers are unafraid to implement measures that create friction in the purchasing process for specific products, understanding that the added layer of security outweighs potential inconvenience for genuine customers. For example, at Costco, electronics are often sold using a ‘pay-and-collect’ feature, meaning customers pay for the item before it’s ever even placed in their shopping cart and taken from a secure area. Best Buy employs a similar tactic, keeping certain high-value inventory off the main sales floor until a customer specifically requests it, thereby preventing casual browsing from turning into a quick grab-and-dash.
In hardware and agricultural supply stores, where power tools and other expensive equipment are prevalent, proactive security is paramount. At both Lowe’s and Tractor Supply, power tools are frequently secured on locked shelves. This simple yet effective measure necessitates customers to engage with a staff member to access the item, automatically introducing a layer of human observation. Lowe’s enhances this even further by selling some products that are specifically designed not to function unless they are activated at the point of purchase. This innovative approach effectively renders stolen goods useless, removing the incentive for theft and protecting inventory even if an item were to leave the store without proper transaction. These secure display practices underscore a philosophy of making theft genuinely difficult, costly, and ultimately unrewarding for criminals.
The fourth crucial pillar, and perhaps one of the most widely discussed in the current retail climate, is the strategic minimization or careful management of self-checkout lanes. Self-checkout technology has been widely implicated in spikes in theft rates following its introduction, making retailers re-evaluate its widespread adoption. This is a battleground where these successful retailers have shown particular acumen. Best Buy and Tractor Supply, for instance, maintain a minimal-to-nonexistent presence of self-checkout options. By prioritizing traditional cashier-led transactions, they inherently reduce the opportunities for “sweethearting” (under-scanning items) or outright theft that can occur in less supervised self-service environments.
Lowe’s, while not entirely eschewing self-checkout, has made substantial investments in sophisticated asset-protection technology. Their systems are designed to keep an exceptionally sharp digital eye on every corner of the store, including self-checkout lanes, providing a robust layer of surveillance and deterrence. Costco, which did introduce self-checkout three years ago, initially observed a slight increase in inventory shrink. However, the company swiftly adapted by taking a more “hands-on approach to monitoring what goes on in those lanes,” leading to a reversion of those rates to their longer-term, lower trend. This demonstrates that while self-checkout can be a vulnerability, strategic oversight and technological integration can mitigate its risks. The wider industry context is telling: up to 20 percent of shoppers have admitted to stealing at self-checkout lanes at least once, according to Retail Wire, even as half of all cash registers are converting to kiosks. The prudent approach of these winning retailers clearly cuts against this trend.
Finally, the fifth and arguably most impactful pillar underpinning the success of these retailers is their unwavering commitment to maintaining a high staff presence and fostering exceptional customer engagement. In an era where many retailers are cutting staff to reduce costs, these companies recognize that a visible, helpful, and knowledgeable workforce is the single greatest deterrent to theft. Their philosophy is that a well-staffed store is inherently a more secure store, where genuine customer service naturally acts as a powerful anti-theft mechanism.
Best Buy CEO Corie Barry underscored this point, stating, “We just have more employees in our stores and they just do an exceptional job of watching out over our stores.” This isn’t merely about having security guards; it’s about having active, attentive staff throughout the sales floor who are engaging with customers. This high level of interaction creates a less opportune environment for theft. Tractor Supply offers a compelling example, often staffing a relatively small, 20,000-square-foot store with as many as eight employees. This ensures that every customer has ample opportunity for assistance and that potential illicit activities are more likely to be observed. Lowe’s CEO Marvin Ellison, drawing from his extensive retail experience, articulated this sentiment perfectly: “Having spent my entire adult life in retail at every level, the one thing that I understand clearly is that the greatest deterrent for any type of theft activity is effective customer service.” This holistic view positions customer service not just as a sales driver but as a core component of a sophisticated loss prevention strategy.
These five pillars—strategic store location and layout, the sale of large and unwieldy merchandise, proactive secure display methods, a cautious approach to self-checkout, and a strong emphasis on visible, engaging staff—collectively form the strategic blueprint for these retailers’ impressive resilience against theft. While the broader industry continues to grapple with the complexities of retail crime and the ambiguity of data, the demonstrable success of Costco, Lowe’s, Best Buy, and Tractor Supply offers a clear, actionable path forward. Their experiences prove that by implementing intelligent, multi-layered defenses, retailers can indeed turn the tide and win the war against inventory shrink, ensuring sustainable business performance even in challenging times. Their victories are not just individual triumphs but a powerful case study for an entire industry searching for answers.
