Walmart CEO Doug McMillon stated this past week that a rise in shoplifting may spell closure and price hikes for many stores in the Walmart chain.
McMillon shared on an episode of CNBC’s Squawk Box that he believes prosecutors are not enforcing the laws that kept criminals from shoplifting, hinting that the criminal impact on the retailer could have a big impact in the future.
“If that’s not corrected over time, prices will be higher and/or stores will close,” he said on the episode.
McMillion said that the company was seeing higher rates of shoplifting than they’ve seen historically.
The company said it lost $3 billion to theft in 2015, representing 1% of its annual revenue, according to a Reuters report. Walmart has also closed 160 stores in 27 states since 2016.
This comes after adverse economic impacts as a result of the pandemic, a labor shortage and economic inflation.
Earlier this year, Walmart executives explained how their strategy of consistently low prices and the use of “rollback” sale signs keep customers coming back.
“We use rollbacks to communicate not only the reality of prices are coming down at some places, but the emotion or perception we want customers to have about us,” McMillon told CNN in February.
McMillon shared what Walmart is doing to combat the rise in crime, such as putting safety and security measures in place by store location.
Walmart didn’t share specifics on which areas were likely to be targeted for permanent store closure, but it appears that Walmart has already started preparing for significant changes to combat theft.
A study by the Los Angeles Times reported that more high-end products, such as cosmetics, were being held in a separate area that required immediate purchase before being allowed into the rest of the store. Other items were locked behind plexiglass to prevent theft.
Walmart isn’t alone in this struggle, either. Last month, Target reported seeing a 50% increase in shoplifting compared to the previous year. Target blamed this theft on organized rings instead of small-time thieves.
Regardless, McMillon was firm in his warning regarding the future of the Arkansas-grown company.
READ ALSO: SPOTLIGHT ON SMALL BUSINESS: WILLY D’S ROCK & ROLL PIANO BAR
