Dollar Tree and Family Dollar are the latest retailers to not only be affected by shoplifting, but to create a plan to combat theft.
CEO Rick Dreiling told investors during a recent earnings call that the stores will start being more careful with its inventory as a result of the company’s experience with “shrink,” – the industry term for lost merchandise.
“We are now taking a very defensive approach to shrink,” Dreiling said in the call. “And it’s taken us a quarter, but we have several new shrink formats that we’ll introduce in the back half of the year.
“It goes everything from moving certain SKUs [stock-keeping-units] to behind the check stand. It has to do with some cases being locked up. And even to the point where we have some stores that can’t keep a certain SKU on the shelf, just discontinuing the item. So we have a lot of things in the works that [are] going to roll forward.”
What does this mean for consumers?
While Dollar Tree, and countless other retailers are working to implement anti-theft efforts, what does this mean for consumers?
The shopping experience is likely to change, for one. With items locked up or behind cash registers, shoppers will have to ask employees for assistance with securing certain things before checking out.
On top of the store experience, consumers may also want to prepare for higher prices in the store. In late 2022, Dollar Tree raised prices as a result of inflation, with many of its items going up to $1.25.
Now, as more and more inventory is lost due to theft, Dreiling said the company will consider price increases in the future.
Theft is on the rise
While there were talks of implementing some policies to deter theft at Dollar Tree’s earnings call in May of 2023, the problem has intensified in recent months, making these efforts to secure merchandise all the more necessary.
Dreiling reported that costs related to lost merchandise have gone up at both Dollar Tree and Family Dollar. The former saw a 0.75% increase in stolen merchandise costs since July 2022, while the latter experienced a 0.45% increase since last July.
The retailer also saw its gross profit margin take a hit between last quarter and this quarter, also as a result of increased theft. That figure went from nearly 33% last quarter to under 30% this quarter.