The Economic Toll of Rising Retail Theft: A Call for Government Action

By JD Washington

In the battle against the alarming surge in theft, particularly within the retail sector, small businesses are taking a significant hit. As New York City Councilmember Sandra Ung aptly puts it, these businesses are the backbone of our economy and are struggling to thrive amidst a rising tide of theft. But theft doesn't just impact individual businesses; it resonates across communities and the broader economy. This article explores the multifaceted economic consequences of retail theft and why it's high time for government intervention.

The rapid increase in theft is causing havoc across the retail landscape, with severe implications for businesses of all sizes. "The alarming rise in theft is hurting all aspects of the retail sector, but it is especially damaging to small businesses, which are the backbone of our economy," said New York City Councilmember Sandra Ung. "We can't expect them to thrive in an environment where they must constantly be vigilant against criminals."

So, how does theft impact the economy?

The Immediate Losses

Theft leads to an immediate loss of products for sale, directly hurting a company's ability to offer items to consumers willing to buy them. Beyond this, the costs to replace stolen goods significantly increase production costs. For small businesses operating on tight budgets, this can be particularly crippling. Preventing future theft can also eat into company revenues, causing a dip in profit.

The Community Suffers

Retail theft isn't just a blow to businesses; it reverberates throughout the community. The reduction of staff or wages for employees becomes necessary when stores lose profits, leading to job insecurity. Worse yet, stores forced to close due to losses result in the loss of community jobs, often in areas where employment opportunities are already scarce. Moreover, the decline in state and local sales tax revenue due to shuttered businesses directly impacts local programs and services that communities rely on.

The United States is grappling with what many are calling an epidemic of thefts that cost retailers nearly $100 billion in 2021 alone. The consequences are evident. In May, Wal-Mart announced the closing of 23 more stores nationwide. Just a month earlier, Target revealed plans to close four stores amid reports that the chain is slated to lose $600 million to organized theft by the end of the year.

But as is often the case, the most vulnerable communities bear the brunt of these closures. Remember that "landmark" Baltimore grocer that closed last month due to rampant theft? It was one of the only retailers in the city's historic Mt. Vernon district.

Yet, it's not just big-box stores and significant corporations feeling the pain. Theft among small-business owners in New York City has risen by a staggering 77% over the past five years, accounting for losses totaling $330 million. A lack of a comprehensive public safety plan, inadequate prosecution of offenders, and a revolving door of the justice system have all contributed to this grim reality.

That's why security is becoming an essential part of doing business, just as much as the product or service itself. The adage holds true: if you don't pay for the expense of security, you will ultimately pay for the expense of theft.

So, why must the government pay more attention to these numbers and their economic effects?

The government plays a crucial role in ensuring its citizens' and businesses' safety and prosperity. In the face of rising theft, policymakers must consider comprehensive approaches to tackle the issue. Investment in law enforcement, robust prosecution of offenders, and community support programs are all critical components. Moreover, addressing the root causes of theft, such as unemployment and social inequality, should be central to any government's agenda.

The economic toll of retail theft is not a burden that businesses, especially small ones, should carry alone. It's a challenge calling for collaborative efforts from the public and private sectors. As the saying goes, a rising tide lifts all boats; it's time for the government to help businesses and communities stay afloat in these troubled waters.