Target announced on Tuesday that it will be closing nine of its stores in response to a significant increase in theft and crime. This decision comes as a measure to ensure the safety of its team members and guests, as well as to address unsustainable business performance.
The affected stores include one in New York City, two in Seattle, three in San Francisco, and three in Portland. The closures will take effect on October 21st. However, Target will still keep dozens of stores open in these markets, with 96 stores in New York, 22 in Seattle, 32 in San Francisco, and 15 in Portland. As of July 29, 2023, Target had a total of 1,955 stores across the United States.
Target has been actively addressing the rising levels of crime at its stores. During its recent quarterly call with investors in August, the company's management team highlighted a 120% increase in theft incidents involving violence or threats of violence compared to the same period last year.
Additionally, theft has had a negative impact on Target's margin. The loss of inventory from theft and damage, known as shrink, has reduced gross margins by 0.9 percentage points in the latest quarter.
Other retailers, including Walmart, Amazon's Whole Foods, and convenience store chain Wawa, have also closed stores in city centers recently. While these closures were due to various reasons such as profitability concerns and worker safety, few have explicitly attributed the closures to rising theft and crime like Target has done.
Prior to making this decision, Target invested heavily in strategies aimed at preventing and deterring theft and organized retail crime. These efforts included adding more security team members, utilizing third-party guard services, and implementing theft-deterrent tools throughout the business. However, despite these measures, Target continues to face significant challenges in operating these stores safely and successfully.
In response to the news, shares of Target fell 2.2% to $109.78 on Tuesday, bringing the year-to-date decline to 26%.
