Retail Group withdraws sensational claim about ‘organised’ shoplifting

A national lobby group has retracted its startling estimate that “organized retail crime” was responsible for nearly half of the $94.5 billion in retail merchandise that disappeared in 2021, a figure that has reinforced claims that the United States was facing a nationwide wave of shoplifting.

The group, the National Retail Federation, edited that claim last week from a widely cited report issued in April after the trade publication Retail dive revealed that faulty data had been used to arrive at the inaccurate figure.

The withdrawal comes as retail chains like Target continue to claim they are victims of massive retail theft operations that have cut into profits, forcing them to close stores or harass customers by stockpiling products.

The claims have been fueled by widely shared videos of some brazen shoplifters, including footage of masked groups smashing windows and taking expensive wallets and mobile phones. But the data shows that this impression of rampant crime was a mirage.

In fact, shoplifting is actually lower this year in most of the country than it was a few years ago, according to police data. Some exceptions exist, including New York City. But in most major cities, shoplifting has fallen by 7 percent since 2019.

Organized retail crime, where multiple individuals steal products from different stores and later sell them on the black market, is a real phenomenon, said Trevor Wagener, chief economist at the Computer & Communications Industry Association, who has researched retail data. But he said organized groups were likely responsible for only about 5 percent of retail items that went missing between 2016 and 2020.

He emphasized that there is “a lot of uncertainty and imprecision” in measuring losses because it is difficult to distinguish what is shoplifting and what is organized crime.

Mr Wagener testified in Congress in June about the discrepancy in the National Retail Federation’s report.

Even as it withdrew the figure and revised the report, the federation, which has more than 17,000 member companies, insisted in an emailed statement that its focus on the issue was appropriate.

“We stand by the widely accepted fact that organized retail crime is a serious problem that affects retailers of all shapes and sizes in our country,” the statement said. “At the same time, we recognize the challenges that retailers and law enforcement have in collecting and analyzing an accurate and agreed-upon set of data.”

At issue is “total annual decline” – the industry term for the value of merchandise disappearing from stores without payment, due to theft, damage and inventory tracking errors.

Mary McGinty, a spokeswoman for the federation, said the error was caused by an analyst from K2 Integrity, a consulting firm that helped prepare the report.

The analyst, who was not named, linked a 2021 National Retail Federation survey to a quote from Ben Dugan, the former chairman of the advocacy group Coalition of Law Enforcement and Retail, who said in Senate testimony in 2021 that organized retail crime is “responsible for $45 billion in annual losses for retailers.”

Mr. Dugan cited the federation’s 2016 National Retail Security Survey, which actually referred to the total cost of contraction in 2015 — not the amount lost to organized retail crime alone, Ms. McGinty said.

Alec Karakatsanis, a civil rights attorney who has studied and criticized how the media covered organized retail crime, said the retraction underscored how some news organizations, which have covered the issue of shoplifting extensively, “were being used as a tool by certain vested interests. to create a lot of fear about this issue, when in fact it was quite clear all along that the facts were wrong.”

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 retail theft. The company’s decision came months after a video viewed millions of times showed a man, holding a trash bag, openly stealing products from a Walgreens as others watched.

But an October 2021 analysis of The San Francisco Chronicle showed that police data on shoplifting did not support Walgreen’s explanation for the store closings.

Ultimately, Walgreens backed away from its claims. In January, a company executive said Walgreens may have overestimated the impact on its business, saying, “Maybe we cried too much last year.”

Mr. Karakatsanis said the exaggerated narrative of widespread shoplifting was weaponized by the retail industry as it lobbied 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 issue. Earlier this year, California Governor Gavin Newsom, Democrat, responded to reports of large-scale thefts in the state with a call for tough prosecution of shoplifters And a plan to invest millions of dollars in the fight against ‘organized shoplifting’. Gov. Ron DeSantis, Republican of Florida, signed a bill last year targeted shoplifting, and former President Donald J. Trump called for violence and told Republican activists in California this year that police shoot shoplifters as they leave a store.

Mr. Wagener, the chief economist of the Computer & Communications Industry Association, said he immediately labeled the National Retail Federation’s April report as inaccurate. The error was troubling, he said, because the federation had long been seen as a trusted data provider for the industry.

What made the federation’s mistake even more surprising, Mr 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 costs retailers an average of $719,548 per $1 billion in sales – a figure that doesn’t come close to the claim of around 50 percent made in the April report.

Another study from the National Retail Federation shows this to be the case that all external thefts – including those not linked to organized retail crime – were responsible for 37 percent of the loss, a figure that would still be billions of dollars less than the incorrect estimate of 50 percent made in April.

“It would be a bit like the census claiming that almost half of the U.S. population lives in the state of Rhode Island,” Wagener said.