Shoplifting is a fact of life for retailers. But a surge in violent and organized retail crime is triggering huge losses for Target (TGT), Kohl’s (KSS), Nordstrom (JWN), Walmart (WMT) and other stores. And the problem is getting worse.
“Shrink was a big headwind for a lot of the retailers in the second quarter, causing many of them to experience greater gross margin pressure than expected. And I think that’s what caused the pressure on the stocks,” said Joe Feldman, senior managing director at Telsey Advisory Group. Some may have had a decent quarter, but guidance included additional shrink pressure. “Any way you slice it, shrink did flare up and was running as a bigger pressure point for a broader group of retailers than I think people anticipated,” he said.
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