Walmart CEO Doug McMillon Says Organized Retail Theft Could Lead to Stores Closing

Retail theft is up, per The National Retail Federation — and Walmart is no exception.

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By Gabrielle Bienasz

Rising retail theft could drive companies like Walmart to close stores or raise prices, said Walmart CEO Doug McMillon at an appearance on CNBC's "Squawk Box" Tuesday.

"Theft is an issue. It's higher than what it has historically been," he told the program.

Companies have faced increasingly organized and brazen thefts from retail stores. In Palo Alto, California in late November, two men stole devices from an Apple store in a large crowd of people, making off with some $35,000 into a getaway car, according to Palo Alto Online.

"If that's not corrected over time, prices will be higher, and/or stores will close," McMillon also said on the show.

The National Retail Federation said in its 2022 Retail Security Survey that 32.8% of surveyed retailers said organized retail crime has become "much more" of a priority and increased risk in the past five years.

"Violence is an increasingly important concern among retailers," including things like theft and gun violence, the report added.

Organized retail crime, which involves people acting as a network or team of some sort, is also a growing concern.

"As has been detailed throughout this report, external theft and [organized retail crime] in particular, is a significant and growing area of concern for retailers," the report said. Fifty-two percent of respondents said organized retail crime had gone up, and none reported it went down, per the survey.

The NRF recommends that retailers create ORC teams to identify patterns to help keep stores from being targeted— but the overwhelming majority (68.5%) of retailers do not have one.

McMillon said Walmart, which has over 4,000 locations in the U.S., primarily relies on local law enforcement.

"We've got safety measures, security measures that we've put in place by store location. I think local law enforcement being staffed and being a good partner is part of that equation, and that's normally how we approach it," he said on the show.

"It's really city-by-city, location-by-location," he added. Organized retail crime of this type has increased before in difficult economic times, as it did after the 2008 recession. However, other research has failed to establish a consistent link between crime and various macroeconomic factors, like the unemployment rate.

McMillon, when pressed, said he wanted "consistency and clarity" from policymakers on solutions for retail theft.

Consumers are also being squeezed by historic inflation, despite it cooling off slightly in October.

The Wall Street Journal reported last month that Walmart (and competitors like Target and Amazon) was putting pressure on suppliers to keep prices down.

Related: Walmart Has The Power to Say No to High Prices Set by Suppliers — But We Don't. Here's What Small Businesses Can Do to Reduce Costs.

"We serve everybody," McMillon said on CNBC. They have "budget-conscious consumers" who "have been under inflationary pressure now for months" he added.

At the same time, he affirmed Walmart is seeing an increase in customers who make over $100,000 a year — suggesting everyone is trying to save money right now on purchases. (Though Americans are not actually putting a lot of money in savings at the moment, despite a looming recession.)

To that end, he said inflation has stabilized or come down in some areas, including general merchandise, but has been "stubborn" in the area of dry goods and consumables.

General merchandise includes things like clothes and sports-related equipment.

"In toys, sporting goods, apparel, categories like that, prices have come down more aggressively... We're still inflated but we're not inflated nearly as much as we are in the other categories," McMillon said.

Gabrielle Bienasz

Entrepreneur Staff

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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