by A national lobbying group has backed away from its surprising estimate that “organized retail crime” was responsible for nearly half of the $94.5 billion in store merchandise that went missing in 2021, a figure that helped amplify claims by that the United States was experiencing a nationwide wave of shoplifting.
The group, the National Retail Federation, edited that statement last week from a widely cited report published in April, after the trade publication Retail Diving revealed that erroneous data had been used to arrive at an inaccurate figure.
The pullback comes as retail chains like Target continue to say they are victims of major theft operations that have cut into their profits, forcing them to close stores or inconvenience customers by locking up their products.
The accusations have been fueled by widely shared videos of some cases of brazen thieves, including images of masked groups smashing windows and grabbing high-end wallets and cellphones. But the data show that this impression of rampant crime was a mirage.
In fact, retail theft has been lower this year in most of the country than it was a few years ago, according to police data. There are some exceptions, including New York City. But in most major cities, shoplifting incidents have fallen 7 percent since 2019.
Organized retail crime, in which individuals steal products from multiple stores and then sell them on the black market, is a real phenomenon, said Trevor Wagener, chief economist at the Computer & Communications Industry Association, which has conducted research on retail data. . But he said organized groups were likely responsible for about 5 percent of store merchandise that went missing between 2016 and 2020.
He highlighted that there is “a lot of uncertainty and imprecision” when it comes to measuring losses, because it is difficult to distinguish what is theft and what is organized crime.
Mr. Wagener testified in Congress in June about the discrepancy in the National Retail Federation report.
Even as it retracted the figure and revised the report, the federation, which has more than 17,000 member companies, insisted in an emailed statement that focusing on the issue was appropriate.
“We support the widely understood fact that organized retail crime is a serious problem affecting retailers of all sizes and communities across our nation,” the statement said. “At the same time, we recognize the challenges the retail industry and law enforcement face in collecting and analyzing an accurate and agreed upon set of data.”
At stake is “total annual loss,” the industry term for the value of merchandise that disappears from stores without being paid for, due to theft, damage and inventory tracking errors.
Mary McGinty, a spokeswoman for the federation, said the error was caused by an analyst at K2 Integrity, an advisory firm that helped produce the report.
The analyst, who was not identified, linked a 2021 National Retail Federation survey to a quote from Ben Dugan, former president of the advocacy group Coalition of Law Enforcement and Retail, who said in Senate testimony in 2021 that Organized retail crime “accounts for $45 billion in annual losses for retailers.”
Dugan was citing the federation’s 2016 National Retail Security Survey, which was actually referring to the overall cost of loss in 2015, not the amount lost to organized retail crime alone, McGinty said.
Alec Karakatsanis, a civil rights attorney who has studied and criticized how the media has covered organized crime in retail, said the retraction underscored how some news organizations, which have extensively covered the topic of shoplifting, were “used as tool by certain vested interests.” generate a lot of fear about this issue when, in fact, it was quite clear from the beginning that the facts did not add up.”
One of the most prominent examples came in October 2021, when Walgreens said it would close five stores in San Francisco, citing repeated cases of organized theft. The company’s decision came months after a video viewed millions of times showed a man, with a garbage bag in his hand, openly stealing products from a Walgreens while others watched.
But an October 2021 analysis by The Chronicle of San Francisco showed that the Police Department’s data on shoplifting did not support Walgreen’s explanation for store closures.
Ultimately, Walgreens retracted its claims. In January, a company executive said Walgreens may have exaggerated the effects on its business: “Maybe we cried too much last year.”
Karakatsanis said the exaggerated narrative of widespread shoplifting was weaponized by the retail industry as it pressured Congress to pass bills that would regulate online retailers, which they claim is where much of the stolen product ends up. .
Commentators and politicians have seized on the topic. Earlier this year, Gov. Gavin Newsom, D-Calif., responded to reports of large-scale thefts in the state with a call for Harsh process against thieves and a plan invest millions of dollars to fight “organized retail theft.” Gov. Ron DeSantis, R-Florida, signed a bill last year targeting retail theft, and former President Donald J. Trump called for violence and told Republican activists in California this year that police should Shoot thieves as they leave a store.
Wagener, chief economist at the Computer and Communications Industry Association, said the National Retail Federation’s April report immediately struck him as incorrect. The error was concerning, he said, because the federation has long been considered a trusted provider of data to the industry.
What made the federation’s error even more surprising, Wagener said, was how starkly the figure contrasted with the group’s own previous findings.
In 2020, the federation said in a report that organized retail crime cost retailers an average of $719,548 per $1 billion in sales, a figure that would be nowhere near the roughly 50 percent claimed in the April report.
Another survey from the National Retail Federation showed that all external thefts (including non-organized crime-related retail thefts) accounted for 37 percent of losses, a figure that would still be billions of dollars less than the incorrect 50 percent estimate made in April.
“It would be a little like the census stating that almost half of the American population lives in the state of Rhode Island,” Wagener said.
