Target's successful closures could trigger a flood of closures as the largest U.S. chains still struggle with theft, experts warn

After Target was forced to close several stores to combat theft, the company saw a huge increase in sales nationwide, which may lead to more closures at other retail chains.

Retail experts are now warning that the positive impact of Target’s store closures could lead other major stores like TJ Maxx and Marshalls to do the same.

Target reports higher sales since closing several stores due to crime across the countryPhoto credit: Getty

Last year, Target customers saw stores close in numerous major cities including Seattle, Washington; New York City, New York; San Francisco, California; and Portland, Oregon.

At the time, the retailer had become aware of the increasing retail crime plaguing businesses large and small across the country.

Target said theft and organized retail crime had put its customers and employees at risk.

“Before making this decision, we invested heavily in strategies to prevent and deter theft and organized retail crime in our stores, including hiring additional security guards, using external security services and implementing theft protection measures throughout our business,” the company said.

“Despite our efforts, we unfortunately continue to face fundamental challenges in operating these businesses safely and successfully.”

While the closures may have caused concern, the company does not appear to have suffered any damage.

According to the New York Post, Target shares rose 11 percent in premarket trading this week.

Target also expects total earnings of between $9.00 and $9.70 per share for 2024.

Target had previously expected a range between $8.60 and $9.60.

Target COO Michael Fiddelke cited lower “inventory losses” – also known as losses due to theft or shoplifting – as one of the reasons for this positive trend.

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Since these numbers are a positive sign for the company, experts say they could encourage other retailers to follow suit.

Burt Flickinger III, managing director of Strategic Resource Group, told Marketwatch that the success of the store closings “could be a big sign.”

According to reports, some experts have already heard of similar steps being taken by some retailers.

Patric McCall, president and CFO of McCall Risk Group, told the New York Post that companies owned by TJX Brands – including TJ Maxx, Marshalls and HomeGoods – are considering closing some stores in Chicago, Illinois.

Anti-theft measures introduced by retailers

Retailers in the US and Canada have implemented anti-theft strategies. The US Sun has compiled a list of the measures that have been implemented in stores.

Lock items in cupboards.
Safety pins.
surveillance cameras.
Signs warn of the consequences of theft.
Receipt scanner.
Receipt checks.
Cart with locking technology

“It also becomes a customer service problem because many of these retailers are already understaffed and now don’t have the manpower to have extra people on the sales floor opening those cabinets or displays every time a customer needs a product,” McCall said.

Others warned that the closures could lead to a “retail desert” in high-crime areas.

As store closures are considered, some politicians have sought to take measures to protect retail workers and customers.

Earlier this month, California Governor Gavin Newsom signed ten bills to combat theft and shoplifting.

Target’s anti-theft measures

Target has implemented numerous anti-theft measures to combat crime in the store.

The retail giant has placed some items behind locked display cases, prompting a backlash from customers.

In April 2024, reports emerged that the company plans to equip its self-checkout lanes with TruScan cameras.

As a further step to combat theft, Target has also equipped its self-checkout lanes with weight sensors.

DEFENDING PRICES

At the same time, major retailers like Target sought to defend their business practices as Democratic presidential candidate Kamala Harris railed against “corporate price gouging in the food and grocery industry.”

If elected president, Harris has announced that she will ban price gouging, which she believes fuels inflation in food and household goods.

In response to the allegations, Target CEO Brian Cornell said retailers had no room to gouge prices because they could find the goods cheaper elsewhere.

“We’re in a penny business,” Cornell told CNBC.