Walmart Collabs With Cops for Atlanta Store Relaunch

Vicki M. Young
·5 min read
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Walmart came up with a novel solution to retail’s nearly $100 billion crime-fueled shrink epidemic.

Walmart calls in the cops

America’s biggest retailer is reopening a closed Georgia store, turning what used to be a sprawling supercenter into a small-footprint grocery market with an Atlanta Police Department substation right inside the four walls.

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Earlier this year, Walmart said it’s relaunching the Vine City location in Atlanta next year after a suspected arson destroyed the store in December. Walmart and city officials at an Aug. 29 community meeting said the location would reopen in May selling groceries and offering pharmacy services alongside the police outpost.

Walmart will receive a tax break through Invest Atlanta, the city’s economic development arm. It was created to attract more grocery stores into underserved communities. While the substation won’t be open around the clock, the enhanced law enforcement presence could deter potential shoplifters.

Organized retail crime

Flash-mob mash-and-grabs and routine shoplifting are all too common in retail today. Dollar Tree Inc. CEO Richard Dreiling told investors during the company’s second quarter conference call last month that both the Dollar Tree and Family Dollar banners will be forced to install locked cases or move some items behind the checkout stand. The company might have to stop carrying some products. CFO Jeffrey Davis acknowledged that shrink “advanced a little further” than what leadership expected. For the quarter, shrink helped drive the gross profit margin down to 29.8 percent from 32.7 percent in the year-ago quarter.

Target Corp. CEO Brian Cornell said in May that organized retail crime will add $500 million in losses due to theft this year, to more than $1.2 billion for all of 2023. Shrink losses totaled nearly $220 million in the second quarter ended July 29. Shrink topped $750 million in 2022, according to estimates based on the retailer’s financial disclosures.

“While there are many potential sources of inventory shrink, theft and organized retail crime are increasingly important drivers of the issue,” Cornell said in May, adding that the chain was focused on “managing the financial impact on our business so we can continue to keep our stores open, knowing they create local jobs and offer convenient access to essentials.”

Target isn’t the only retailer offering straight talk on shrink.

Dick’s Sporting Goods CEO Lauren Hobart blamed “elevated inventory shrink” for second-quarter profits falling 23 percent, despite sales rising 3.6 percent. Shrink-related losses topped $27 million in the three-month period. At Macy’s, executives said second-quarter shrink cut earnings per share by 4 cents, or $11.2 million based on 279 million diluted shares for the quarter.

Because the “shrink environment has continued to worsen,” Dollar General’s CFO Kelly Dilts said last month, the dollar store retailer expects “$100 million of additional shrink headwinds” since its first quarter call on June 1.

Random acts and gun violence

Retailers are already worried about protecting store associates and customers from incidents of theft. Now they have to contend with rising gun violence inside and outside their stores.

On Aug. 26, a suspect described as a white 20-something man who walked into a Dollar General store in Jacksonville, Fla. opened fire, killing three victims who were Black, before turning the gun on himself. At a news conference that evening, Jacksonville Mayor Donna Deegan described the shooting as a “hate-filled crime.”

On a call with investors last month, Dollar General CEO Jeff Owen said the company lost a store employee and two customers from the “senseless and hate-filled” incident in Jacksonville. Expressing “deepest sympathies to their families and friends,” Owen also praised local law enforcement’s quick response and continued support in protecting store associates and customers.

On Sept. 1, Dollar General said it would provide more than $2.5 million to organizations focused on “healing and hope” for Jacksonville. The dollar store plans to reopen in late September or early October after a full remodel. Dollar General will also donate $50,000 to local area food banks to help address food insecurity.

Jacksonville wasn’t the first such incident in the past year. On May 6, a gunman using an AR-15 weapon began firing indiscriminately at people in front of an H&M store at the Allen Premium Outlets mall in Dallas. The shooter, who was killed by an officer, took the lives of eight people, including three children, and injured seven others. And Walmart was the scene of a deadly Thanksgiving week shooting last year when a gunman killed six and injured four.

Federal legislative update

In an Aug. 28 blog post, David Johnston, the National Retail Federation’s vice president, asset protection & retail operations outlined the industry’s focus on prioritizing employee and customer safety.

He wrote that the 2022 National Retail Security Survey found that eight in 10 retailers reported an increase in violence against employees in 2021, with one retail employee recounting facing 22 robberies within a two-day window. And Johnston said cargo theft, e-commerce and digital fraud also contribute to organized retail crime.

Johnston cited the INFORM Consumers Act (Integrity, Notification and Fairness in Online Retail Marketplaces for Consumers Act), which took effect on June 27, as a major legislative success that thwarts criminals trying to resell stolen goods on online marketplaces. Up next is the Combating Organized Retail Crime Act (CORCA), which is pending in the House and Senate. CORCA aims to put the ringleaders behind the organized retail crime rings in jail. It would also establish an inter-agency Organized Retail Crime Coordination Center to facilitate intelligence gathering and sharing and cross-agency investigations at the national level.

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