What genius retail executive mind could have figured this one out - that locking up merchandise in stores actually makes its more difficult for honest, paying customers to get to, and buy what they want?
Walgreens - facing a significant drop in year-over-year earnings - just announced plans to close 450 more stores nationwide, according to Futurism/The Byte.
Efforts to curb "shrink" — losses from theft or fraud — included increased security measures, such as locking merchandise in containers requiring staff assistance.
However, these measures proved ineffective and counterproductive, frustrating customers.
CEO Tim Wentworth said on the company's earning's call: "It is a hand-to-hand combat battle still, unfortunately."
"But it does impact how sales work through the store because when you lock things up. For example, you don’t sell as many of them. We’ve kind of proven that pretty conclusively," he continued.
The report says that Walgreens is struggling with rising prices, which are making it harder for consumers to afford products. The company faces challenges in its retail business due to inflation and higher interest rates, leading to more cost-conscious shopping and changes in purchasing habits.
In 2021, Walgreens faced backlash for closing five stores in San Francisco, citing "organized" shoplifting, though police records showed only 23 incidents between 2018 and 2021.
During a 2023 earnings call, Walgreens CFO James Kehoe admitted the company may have over-invested in security to address theft, acknowledging the company had perhaps exaggerated the problem. This suggests Walgreens has often used theft concerns as a cover for deeper issues within its retail operations.
What genius retail executive mind could have figured this one out – that locking up merchandise in stores actually makes its more difficult for honest, paying customers to get to, and buy what they want?
Walgreens – facing a significant drop in year-over-year earnings – just announced plans to close 450 more stores nationwide, according to Futurism/The Byte.
Efforts to curb “shrink” — losses from theft or fraud — included increased security measures, such as locking merchandise in containers requiring staff assistance.
However, these measures proved ineffective and counterproductive, frustrating customers.
CEO Tim Wentworth said on the company’s earning’s call: “It is a hand-to-hand combat battle still, unfortunately.”
“But it does impact how sales work through the store because when you lock things up. For example, you don’t sell as many of them. We’ve kind of proven that pretty conclusively,” he continued.
The report says that Walgreens is struggling with rising prices, which are making it harder for consumers to afford products. The company faces challenges in its retail business due to inflation and higher interest rates, leading to more cost-conscious shopping and changes in purchasing habits.
In 2021, Walgreens faced backlash for closing five stores in San Francisco, citing “organized” shoplifting, though police records showed only 23 incidents between 2018 and 2021.
During a 2023 earnings call, Walgreens CFO James Kehoe admitted the company may have over-invested in security to address theft, acknowledging the company had perhaps exaggerated the problem. This suggests Walgreens has often used theft concerns as a cover for deeper issues within its retail operations.
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