In a move that reverberated across the national retail landscape, Target announced on September 26 its decision to close nine stores across four states. The stated reason was stark: “theft and organized retail crime had made them too dangerous to run.” This declaration immediately ignited a significant public conversation, seemingly providing concrete evidence that escalating retail crime was indeed preventing major corporations from operating profitably and safely.
However, a rigorous, monthslong investigation by CNBC into these closures presents a more complex picture, casting considerable doubt on Target’s singular explanation. The findings suggest that the company’s announcement may have been designed to serve multiple strategic objectives, potentially including advancing its legislative agenda for a crackdown on organized retail crime and subtly obscuring underlying financial performance issues at these specific locations.
Target’s official statement at the time of the September closures was unequivocal: “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.” This was not an isolated statement; the company had also previously cited inventory shrinkage, largely attributed to theft, as a factor that would cut profits by $500 million in 2023, following a $700 million hit in 2022.
The timing of Target’s announcement raised immediate questions among industry observers. It came just hours after the National Retail Federation (NRF) released a key annual retail security survey and exactly one month before the trade group planned to lobby Congress for stiffer punishment for organized theft offenders. Notably, Target CEO Brian Cornell serves on the NRF’s board of directors and is a member of its executive committee, highlighting the potential alignment of corporate and industry advocacy.
Retail experts were quick to analyze the situation. Mark Cohen, a professor and director of retail studies at Columbia Business School and former CEO of several major department stores, openly questioned the retailer’s claims. He suggested that the announcement might have been a “stunt, looking to divert attention from the company’s lack of performance overall.”
Cohen further elaborated on his skepticism, stating, “They did not disclose their actual shortage statistics.” He noted that Target discussed the issue in general terms and “implied that the only reason they were closing the stores was because of theft. That may or may not be true. My guess is: Not true.” This perspective underscored the need for more granular data to fully understand the rationale behind such significant operational decisions.
In response to inquiries, Target spokesperson Jim Joice affirmed the company’s broader operational strategy. He highlighted Target’s continuous investment in growth, stating that in 2023 alone, “we opened 21 new stores and remodeled 150 stores as part of our nearly $5 billion investment in strategic initiatives.” Joice also emphasized that the nine announced store closures represented “less than 0.5% of our U.S. footprint, with 1,956 stores currently operating.”
To objectively assess Target’s claims regarding the closures, CNBC undertook an extensive investigation. It utilized public record requests and law enforcement sources to gather crime statistics and 911 call data for 21 Target stores across New York City, Seattle, the San Francisco Bay Area, and Portland, Oregon. This dataset encompassed the nine stores slated for closure and a comparable number of locations that Target chose to keep open nearby, covering the period from January 2021 through September 2023.
The methodology for data collection was precise, focusing only on incidents that resulted in an arrest, a police report or log, or an official police response and handling. Unfounded complaints, duplicate calls, requests for backup, store and welfare checks, mental health crises, overdoses, and vehicle-related incidents not directly linked to the stores were meticulously excluded to ensure an accurate reflection of store-level crime.
The findings from this comprehensive data analysis paint a compelling and, at times, contradictory picture to Target’s narrative. The records reveal frequent crime activity across the surveyed locations. However, a clear and significant trend emerged: “Nearly every store the retailer closed saw less police activity and fewer reported crime incidents than the locations it kept open nearby.”
This trend challenges the direct correlation Target presented between high crime rates and the decision to close specific stores. Only one of the nine stores that Target closed across the four regions, a location in Pittsburg, California, actually registered more crime and police activity than its closest comparable open location, in Antioch, California, according to CNBC’s analysis.
Looking at the San Francisco Bay Area, Target closed three stores, one each in San Francisco, Oakland, and Pittsburg. The now-closed small-format store in Oakland, opened in 2019, reported 96 crime incidents between January 2021 and September 2023. In stark contrast, its nearby Emeryville location, which remained open, recorded 440 incidents during the identical timeframe.
Demographic disparities also appeared to factor into these decisions. The median income in the ZIP code of the closed Oakland store was $76,953, significantly lower than the $114,286 median income in Emeryville. Experts suggest that police departments in higher-income areas might have more resources to enforce property crimes, and shoppers in these areas typically have greater discretionary spending.
Within the city of San Francisco, the small-format store on Folsom Street that was closed recorded at least 84 crime incidents that resulted in police reports between January 2021 and September 2023. Meanwhile, Target’s expansive Union Square location, situated just two miles away and remaining open, documented 486 incidents during the same period. The closed Folsom Street store was situated in an area with lighter foot traffic, contrasting sharply with the bustling tourist and shopping district where the Union Square store is located.
Portland saw the closure of three Target stores, all of which experienced less crime than locations the company chose to keep open. For instance, the Target on Southeast Washington Street, which continues to operate, had 718 reported incidents between January 2021 and the end of September 2023. This figure surpasses the combined total incidents for all three closed stores in Portland over the same period, based on police records.
One of the Portland locations, a small-format store on Northeast Halsey Street, operated for less than three years before its closure. Local crime statistics in Portland somewhat mirrored these findings. Larcenies were up 5% in 2023 in the Hazelwood neighborhood where the Southeast Washington Street store remains open, while they were down 37% and 8% in Hollywood and Richmond, respectively, where stores were closed.
In Seattle, Target shuttered two small-format stores, both of which registered fewer crimes than their nearest counterparts that remained operational. The closed Targets on Northwest Market Street and University Way Northeast reported 235 and 395 incidents, respectively, between January 2021 and September 2023. In contrast, two locations approximately five miles away, on Second Avenue and Northeast Northgate Way, which stayed open, saw 878 and 901 reported incidents, respectively, during the identical period.
Local crime statistics in Seattle also aligned with the store-level data, showing lower reported larcenies in the areas of the closed stores compared to the area of the open Northeast Northgate Way store. Specifically, between January 1, 2021, and October 31, 2023, larcenies were 30% lower near Northwest Market Street and 33% lower near University Way, both of which were closed.
New York City witnessed the closure of one Target store in East Harlem, situated within a larger shopping complex. This location recorded at least 844 incidents between January 2021 and September 2023. However, these figures are dwarfed by those at other Target stores in Manhattan during the same period. A store on Greenwich Street in Lower Manhattan saw 2,090 reported incidents, more than double the East Harlem total, while another location on Grand Street recorded 1,628 incidents.
The demographic and commercial contexts of these New York City locations are vastly different. The Lower Manhattan stores are in bustling areas with significantly higher median income levels and greater foot traffic. The ZIP code for the East Harlem store had a median income of $36,989, whereas the area around the Greenwich Street store boasted over $250,000, and Grand Street was $43,362, according to U.S. Census data.
Intriguingly, Target closed the East Harlem location, citing crime and safety, at the same time it planned to open a new store approximately a mile and a half away on West 125th Street in Harlem. Police records indicate that crime trends are demonstrably worse in the area where the new store is slated to open. Petty theft incidents were down 2.5% in the East Harlem store’s area but up 9% in the proposed new store’s area during the period from January 1 to September 24, 2023, compared to the previous year. Target did not comment on this discrepancy.
Christopher Herrmann, an assistant professor at John Jay College of Criminal Justice and a crime analysis expert, critically assessed Target’s stated rationale. He observed, “It’s interesting that they’re using public safety, or employee safety, as an excuse, kind of, for closing the stores.” Herrmann concluded, “Because the reality is, they’re not closing the stores with the highest rate of retail theft.”
Target spokesperson Jim Joice addressed the discrepancies, noting that “store-level incidents vary widely in severity, and police data won’t show the full extent of what our teams experience on the ground.” Joice reiterated Target’s stance, asserting, “We have repeatedly shared financial data and internal data on the increase of theft-related crime” and have “consistently conveyed our emphasis on safety and highlighted team members’ experiences that demonstrate the impact that theft and organized retail crime have had on our company.”
Beyond the crime data, several alternative explanations emerge for Target’s closure strategy. The legislative agenda of influencing tougher laws against organized retail crime appears to be a significant motivator. The timing of Target’s announcement, coinciding with the NRF’s advocacy efforts, supports this interpretation. The NRF’s annual security survey, issued on the same day as Target’s announcement, revealed that while violence at stores had increased, losses from theft hadn’t changed significantly.
Financial performance also cannot be discounted. Target’s sales had declined year-over-year in both its second and third quarters. Mark Cohen’s suggestion that the closures might “mask its struggles” and “divert attention from the company’s lack of performance overall” gains traction when juxtaposed with the crime data.
Many of the closed locations were “small-format” stores, a relatively new experimental expansion strategy in dense urban areas over the past five years. Target had already closed four similar “underperforming” small-format stores in the spring. This suggests that these newer, smaller footprints might not have met performance expectations, regardless of theft levels, potentially due to market saturation or “cannibalization” of existing stores, as noted by Cohen.
Another layer of analysis points to real estate strategy and demographic factors. Target often retained stores in busier areas with better foot traffic or higher median incomes, even when these locations reported higher incidences of theft and violence. This strategy could be driven by the understanding that higher-income areas offer greater discretionary spending and potentially better-funded police departments, which might be more inclined to address property crimes.
Within the broader retail industry, the discussion around “shrink,” or inventory loss, has been prominent. The National Retail Federation’s 2022 security survey, based on fiscal 2021 data, indicated an average shrink percentage of 1.4 percent, with a median of 1.2 percent. Strikingly, these figures were identical to those reported in fiscal 2016, suggesting overall retail shrink has remained relatively stable over a seven-year period.
The NRF report further clarified the components of shrink. In 2021, external theft, including organized retail crime, accounted for 37 percent of total shrink. However, employee or internal theft was responsible for a substantial 28.5 percent, and process and control failures made up 25.7 percent. This breakdown underscores that external theft is not the sole, or even overwhelming, cause of inventory loss.
Despite the stability in overall shrink percentages, the NRF survey did highlight a grave concern: the dramatic increase in the risk of violence. The reported rise in violence since the pandemic is a shocking 89.7 percent, affecting not only customer interactions but also employee-on-employee incidents. Target itself reported a “stunning 120% rise in theft incidents involving violence or threats in the first five months of this year compared to the same timeframe in 2021 and 2022,” indicating a significant escalation in safety concerns, even if not directly tied to profitability at these specific closed stores.
Target’s focus on organized retail crime is not unprecedented, as the company previously raised alarms about the issue around 2008 during the Great Recession, suggesting a historical pattern where emphasis on theft may peak during periods of economic uncertainty or strategic shifts. Interestingly, the company has reported record profits in recent years, including over $31 billion last year, and is reportedly on track for even better performance this year. This makes the claim that theft alone is forcing profitable stores to close appear incongruent with its overall robust financial health.
The retail industry’s response to theft is varied. While Target has closed stores, other retailers like Walmart, when closing stores in Chicago, attributed the decision to unprofitability rather than explicitly blaming theft. A Walgreens executive even suggested the chain might have “cried too much” over shoplifting earlier this year, contrasting with Target’s firm stance. Nordstrom and Dollar Tree have also cited theft as a concern, with some stores implementing locked cases for high-theft merchandise.
Target has actively invested in a range of theft prevention strategies, including increased security personnel, third-party guard services, and “theft-deterrent tools” such as locking cases for specific merchandise. The company is also collaborating with the US Department of Homeland Security’s investigations division to develop custom tools for detecting and preventing criminal activity, along with investing in cyber defense technology. These efforts indicate a broad commitment to combating retail crime across its operational footprint.
The comprehensive examination of Target’s store closures reveals a multifaceted decision-making process that extends far beyond a simple cause-and-effect relationship with retail theft. While theft and the accompanying increase in violence are undeniably serious challenges confronting retailers, the available data and expert analyses strongly suggest that factors such as financial underperformance, strategic real estate evaluations, and perhaps a deliberate effort to influence legislative action on organized retail crime also played significant roles. The ongoing conversation serves as a vital reminder for observers to look beyond initial corporate announcements and delve into the underlying economic and strategic dynamics at play, ensuring a clearer, more complete understanding of how these significant business decisions are truly shaped.
