Los Angeles, other liberal cities among biggest targets as organized crime problem costs retailers billions

Organized retail crime is surging in large cities across the U.S., according to a recent national survey.

The National Retail Federation — the largest retail association — recently released its 2023 report that found participating retailers reported inventory losses, also known as “shrink,” upward of $112 billion.

Organized retail crime constitutes a group of people who carry out coordinated robberies, usually planned through social media, across businesses. Smash and grabs are a common tactic thieves will do to quickly enter and exit a business with stolen merchandise. 

The report drew from information provided by 177 retail companies, collectively representing $1.6 trillion in retail sales for 2022 in 97,000 retail locations. Compared to 2021, the average shrink rate in FY 2022 increased to 1.6%, up from 1.4%. 

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“And the truth is, this isn’t only big companies — it’s companies large and small. It’s main street merchants and retailers, in small towns across the country,” NRF CEO Matt Shay said Thursday in a press conference with lawmakers on Capitol Hill. “And it’s not only about the dollars involved here, it is about in some cases, the tragic loss of life, the violence, the aggression, that’s playing out in these retail locations.”

Large cities like Los Angeles, Oakland, Houston, Seattle, New York, Denver and a tie between Sacramento and Chicago are among the biggest targets for organized retail theft. L.A. topped the list for the fifth year in a row.

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“[Retailers] have done everything they can to make their stores and their places of business safe,” Shay continued. “They’ve added additional security measures, they’ve protected the goods that are in those stores, they’ve trained personnel to deal with these situations — and in spite of all that, we still need additional help and additional support.”

Shay joined Sens. Chuck Grassley, R-Iowa and Catherine Cortez Masto, D-Nev., during Thursday’s news conference. The lawmakers championed their Combating Organized Retail Crime Act, a bill to combine several law enforcement agencies to tackle retail crime. 

In Iowa, Grassley said organized retail theft is a $1 billion problem.

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“But you also have to recognize not just the theft, but the danger to the employees, the cost to the consumers. And then the impact upon the individual retailers,” he said.

Masto added “I cannot walk out into my community into a retail establishment without hearing from somebody, whether it’s a friend or family, or somebody that works there that has experienced this.”

Last year, NRF advocated Congress to pass the INFORM Consumers Act, which became law and now mandates online marketplaces to authenticate the identities of high-volume third-party sellers.