Home Depot’s CFO Issues Dire Warning To Americans After Huge Crime Spike Sparks Mass Retail Closures

HOME Depot’s Chief Financial Officer (CFO), Richard McPhail, has drawn attention to the escalating organized crime affecting major retailers in the United States. As a surge in retail theft forces both large and small businesses to close, McPhail openly expressed concern about the situation.

McPhail stated during a call with CNBC on Tuesday, “The country has a retail theft problem.” He remained optimistic about Home Depot’s ability to mitigate and alleviate the pressure, but acknowledged the existence of such challenges in the retail landscape.

In March, Scott Glenn, Home Depot’s Vice President of Asset Protection, highlighted the increasing crime rates within their stores. Glenn revealed to CNBC, “I can tell you that in our world, we know that crime is increasing. We see it every day in our stores. Our internal information shows us that that’s on a year-over-year basis, growing at double-digit rates.”

According to the National Retail Federation (NRF), organized retail crime stands as the primary reason for shrinkage in stores, with retailers incurring a loss of $94.5 billion in 2021. The NRF’s 2022 survey indicates that this figure reflects an increase of over $4 billion from the previous year, along with a 26.5 percent surge in organized retail crime during 2021.

The impact of organized crime extends beyond Home Depot, affecting other major retailers like Walmart. Walmart’s CEO, Doug McMillon, issued a warning in December, stating, “Theft is an issue. It’s higher than what it has historically been.” McMillon emphasized that if the situation did not improve, it could result in higher prices or store closures.

In San Francisco, California, the prevalence of rampant criminal activity has prompted the impending closure of three major department stores. Nordstrom announced the permanent closure of two stores, with the Nordstrom Rack store on Market Street scheduled to close on July 1, followed by the Nordstrom store at the nearby Westfield Mall at the end of August. Additionally, Saks Off 5th, located on Market Street, will permanently close later in the fall. Anthropologie bid farewell to its location on May 13 after two decades, citing the dramatic changes in the downtown San Francisco market, impacting customer foot traffic and the ability to operate successfully.

Westfield, home to one of the affected Nordstrom stores, attributed the planned closure to “the deteriorating situation in downtown San Francisco.” The management explained, “A growing number of retailers and businesses are leaving the area due to the unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area.”

The impact of retail crime isn’t limited to large retailers alone; it has also profoundly affected small business owners who struggle to recover from such losses. Tamara Young, the owner of Consign Couture, a luxury consignment store, was forced to shut down in March 2023 due to stolen merchandise worth nearly $56,000 in 2022. Young expressed her frustration, stating, “The amount of work that goes into running a small business, down to the research, tags, and training to do this the right way, and then someone just steals a day’s worth of all your work, it’s like — ‘What’s the point?'”

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